GDP up 10.3% y-o-y in 2Q21 – in line with expectations

RUSSIA ECONOMICS - In Brief 13 Aug 2021 by Alexander Kudrin

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Rosstat reported the Russian GDP was up in 2Q21 by 10.3% y-o-y, which is in line with our expectations (the latest forecast published in early June 2021). It was a preliminary estimate, and Rosstat provided no more details. One cannot rule out that at a later stage, Rosstat may revise the reported growth numbers. So far, however, there is no evidence whether it may be a downward or an upward revision (if at all).As in 1Q21, the Russian GDP was reportedly down by 0.7% y-o-y, the 10.3% y-o-y growth in 2Q21 means that the Q-o-Q growth was exceptionally strong – around 8.5% (not seasonally adjusted). We refrain from relying on seasonally adjusted numbers as Russia’s quarterly time series in compatible fixed prices are relatively short. Hence the reliability of seasonal adjustments at times of shocks and respective structural changes is not high. Usually, in non-seasonally adjusted terms, real GDP grows by six to seven percent every second quarter relative to the first quarter (in rare cases, growth may exceed 7% or be below 6%). Therefore, one cannot rule out that the 1Q21 statistics may be revised up at some point.After later in August, Rosstat will have published monthly statistics for July we will release an updated macroeconomic forecast in early September. At this stage we expect the economy to expand by 3.9% or slightly higher.Evgeny GavrilenkovAlexander Kudrin