Industrial growth moderated in March but remained good enough

RUSSIA ECONOMICS - In Brief 24 Apr 2024 by Evgeny Gavrilenkov

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Rosstat reported that industrial output increased in March by 4.0% y-o-y, which brought the 1Q24 y-o-y tally to 5.6% (y-o-y growth was stronger in February due to a leap year). Seasonally/calendar-adjusted industrial output increased by 0.1% m-o-m. The mining segment grew y-o-y by 0.4% and 1.1% in March and 1Q24. Growth in manufacturing appeared stronger – 6.6% and 8.8% y-o-y (also in March and 1Q24). It looks as though y-o-y growth moderated in March, but it looked good enough in many sub-industries. Food production increased y-o-y by 4.1% and 7.0% in March and 1Q24. The textile industry was up by 5.8% and 7.8%. The woodworking and timber industry grew by 3.5% and 8.0%, and the chemical industry – by 7.1% and 7.6% (all numbers are for March and 1Q24 y-o-y). The metallurgical industry contracted 5.7% y-o-y in March and 0.4% in 1Q24. This contraction stemmed from reduced exports mainly as domestic demand for metals remained strong—the metal-working industry grew by over 30% y-o-y (both in March and 1Q24). Production of computers, electronics, and optical devices was up y-o-y by 31.9% in March and 42.4% in 1Q24. Production of electrical equipment increased by 7.9% and 12.6%, while vehicle production grew by 25.0% and 35.7% (the numbers are also y-o-y for March and 1Q24). All in all, it appears that amid restricted imports, local producers continue to fill the void that originated amid sanctions. As in a couple of days Rosstat will publish its usual economic statistics for March, it will help us to have a clearer view of the short-term economic trends. We plan to publish an updated macroeconomic forecast next week. Meanwhile, the Economics Ministry recently released its n...