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GDP – decline of 4.6% reiterated


Rosstat has published its updated estimate of 2Q15 GDP with an industry breakdown. The headline figure was in line with the preliminary data published in August, leaving output contracting at 4.6% YoY. At the same time, 1H15 GDP shrunk 3.5% on the corresponding period in 2014.

On a seasonally adjusted basis, the contraction in the Russian economy gained pace to 2.5% QoQ SA, from the drop of 1.2% in 1Q15. Retail and wholesale trade are still under significant pressure on the back of a weak demand: the indicator was down 9.9% YoY in 2Q15, after the 7.6% YoY drop in 1Q15 and contributing -0.3pp to the headline (almost as much as transport and communication). Manufacturing is another sector now pushing total output lower, as it contracted 4.8% YoY after a moderate 0.6% decline in 1Q15. The sector accounted for -0.57pp of the overall 4.6% contraction. Mining and quarrying, which supported GDP in 1Q15 with close to 5% growth, also edged lower, down 0.1% YoY in 2Q15 and contributing -0.47pp to the decline in headline growth.

The only sector with a measurable positive contribution was public administration and defence, which contributed 0.05pp and edged up 1.2% YoY.

All in all, the performance of non-tradable sectors was expectedly poor: financial intermediation and hotels and restaurants obviously suffer from weak consumer demand and dropped 5.2% and 7.1%, respectively.

In our base case scenario, the contraction in GDP will slow down in the second half of the year, pulling the whole year number to -3.8%.

Petr Grishin, Alexander Isakov
VTB Capital analysts

GDP, Rosstat

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