GDP growth beats expectations in 3Q23

RUSSIA ECONOMICS - In Brief 17 Nov 2023 by Evgeny Gavrilenkov

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Rosstat reported that Russia’s GDP grew by 5.5% y-o-y in 3Q23, which was well above expectations. Even though it was a flash estimate and no other details have been provided, this figure indicates that economic growth accelerated in 3Q23. In 2Q23, GDP was up by 4.9% y-o-y. Note that the deepest contraction in 2022 was in 2Q22 (GDP was down by 4.5% y-o-y). In 3Q22, GDP fell by 3.5% only. Since 3Q22 and until recently, GDP grew by nearly 0.9%-1.0% q-o-q in seasonally adjusted terms – except for 1Q23 (0.7%). It looks as though in 3Q23, seasonally adjusted GDP grew well above 1.0% q-o-q. Preliminary estimates show that the country’s GDP grew slightly above 2.9% y-o-y in 9M23. It looks like the ruble weakening helped the economy to bounce back. GDP growth in 2023, as a whole, will likely visibly exceed 3.0% - even despite that recently appreciated ruble (below $/RUB 90) will drag GDP growth in 4Q23. In the next few days, we’ll give more color on these issues.