Economic growth steady in November

RUSSIA ECONOMICS - In Brief 28 Dec 2023 by Evgeny Gavrilenkov

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Rosstat reported that the economy was on the same track as in the previous months as the output of the five basic sectors (a monthly proxy for GDP covering about 60% of the national economy) grew by 5.1% y-o-y - both in November and 11M23. The industrial output grew by 3.6% y-o-y in 11M23 only as the mining segment was still under pressure and contracted by 0.4% y-o-y in November and 1.1% in 11M23. In contrast, the manufacturing segment looked healthier and delivered 8.1% and 7.5% y-o-y growth over these periods. Activity in the manufacturing segment grew almost all across the board at a decent pace except for the paper, woodworking, and timber segments (affected by sanctions), which were down by 1%-2%. Production of computers, electronic, and optical devices grew by 34.7% y-o-y. Electrical equipment production increased by over 22% y-o-y (both numbers for 11M23). Car production soared by a factor of 2.7% in November and grew by 17.5% in 11M23. Production of trucks increased even more in 11M23. Total industrial output grew by 0.2% m-o-m last month in seasonally adjusted terms. Retail sales also continue to grow (up by 5.9% y-o-y in 11M23), albeit an accelerating inflation erases the pace of growth in real terms. In the past seven days ending on December 25, inflation w-o-w stayed high (0.28%). The MTD and YTD tallies moved up to 0.73% and 7.42%. In 2023, as a whole, inflation may exceed 7.5%. Despite elevated inflation, the consumption of paid services grew in 11M23 by 4.3% y-o-y. Construction grew by a mere 4.8% y-o-y in November and 7.8% y-o-y in 11M23. In 9M23, Investments in production capacity were up by 10.0% y-o-y (only quarterly data are available in this case)...