According to the first Rosstat estimate, GDP grew 1.6% YoY in 1Q13, down from 2.1% YoY in 4Q12 to the worst reading since the crisis (4Q09). The 1Q13 number is 0.4pp higher than the preliminary estimate provided by the Ministry for the Economy and just a fraction higher than our 1.5% forecast.
The recent data implies a gradual moderation in the annual growth of Russia’s economy, from almost 5% at the end of 2011 to 1.6% in 1Q13. During the first quarter, the key drags on growth were contracting exports volumes (due to the rather bleak global situation) and stalled investment activity (on the back of a sharp deceleration in fiscal spending growth), we believe. Meanwhile, growth was only supported by consumption demand.
Given Rosstat’s data, the QoQ seasonally adjusted annualised growth (SAAR) improved to 1.7% in 1Q13, from 1.3% in 4Q12. So, although the growth looks sluggish in YoY terms (partly as a result of the leap year factor), real GDP growth slightly rebounded in 1Q13 in seasonally adjusted QoQ terms.
We are reiterating our view that 1Q13 is the bottom for quarterly YoY GDP growth this year and the downwards trend has already started rebounding in 2Q13. Overall, the official estimate of the economy growth at the beginning of 2013 is better than expected and thus supports our base case scenario of FY13 real GDP growth at 2.4%. This remains at risk, though, due to the postponement of greater monetary easing steps and of infrastructure spending via the infrastructure bonds mechanism.