Economic performance remained decent in February

RUSSIA ECONOMICS - In Brief 04 Apr 2024 by Evgeny Gavrilenkov

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Following a previous publication on the performance of the Russian industry in 2M24 (up by 6.6% y-o-y and by 8.5% y-o-y in February alone), Rosstat reported that the output of the five basic sectors (industry, agriculture, construction, trade, transportation) grew in 2M24 by 7.8% y-o-y. In February alone, this indicator was up by 10.1% y-o-y. February’s y-o-y higher growth numbers appeared not least due to a leap’s year additional day. The 2M24 data look quite high also due to a base effect as the economy still posted negative y-o-y growth in early 2023 - in the following months, y-o-y growth will moderate. So far, the numbers look not too bad across the board, as retail sales increased by 10.7% in 2M24 and 12.3% in February alone (both numbers are y-o-y). Similar numbers for the consumption of paid services were quite good also (6.4% y-o-y in both cases). Agriculture grew by 0.2% and 0.5%. Transportation grew by 1.3% and 4.1%. Construction was up by 4.5% and 5.1%. In all cases, these are 2M24 and February y-o-y growth numbers. General trends remain largely unchanged as the domestic demand appears robust. It remains fueled by strong wage growth. In January, the average nominal wage grew by 16.6%, and the real one was up by 8.5%. Note that wage statistics are available with a one-month lag. Consumer credit also supports domestic demand – even though the former growth moderates. It looks as though inflation will keep gradually moderating as in the seven days ending on April 1, a w-o-w inflation print was at 0.10%. In the previous week, it was at 0.11%, and as of March 25, inflation MTD stood at 0.22%. All in all, it looks as though in March, the m-o-m inflation could be ...