Economy continued to recover in July, performance differed across sectors

RUSSIA ECONOMICS - In Brief 20 Aug 2020 by Alexander Kudrin

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Rosstat released preliminary statistics on major economic indicators for July, which confirm that the Russian economy is on a recovery track, even though this recovery is not uniform across sectors.Agriculture was up 4.0% y-o-y last month, which brought the 7m20 tally to 3.3% versus 3.0% in 1H20. Retail sales continued to recover and were up m-o-m by 8.2%, which was well above monthly seasonal growth. In July retail sales were down by a mere 2.6%, which brought the 7m20 tally to -5.8 (versus deeper contraction in 1H20 by 6.4% y-o-y). Consumer services posted a deeper contraction, albeit they started bouncing back. In July consumer services were down by 25.5% and the 7m20 tally was down by 20.3%.Construction was slightly down in July (by -0.2% y-o-y) while the 7m20 tally was down by 0.4% y-o-y. According to Rosstat investment in production capacity in 1H20 was down by 4.0% y-o-y. Note that numbers on investment activity are published with some lag and are available on a quarterly basis only.The 7m20 numbers confirm that Russia’s GDP may contract this year by less than 4%, albeit performance by sectors will be uneven.More details on some of these issues will be provided early next week in GKEM Analytica’s report.Evgeny GavrilenkovAlexander Kudrin