“Moderate” GDP contraction in 2Q20 sets the potential for an upside revision of economic performance in 2020 as a whole

RUSSIA ECONOMICS - In Brief 11 Aug 2020 by Alexander Kudrin
Rosstat reported that in 2Q20 the Russian GDP was down by 8.5% y-o-y. It was a preliminary flash estimate, and no other details were provided. The figure is in line with GKEM Analytica’s view that in 2020 GDP may contract by around 4% and even less if some underestimated activities, such as online orders, deliveries, and too low food retail sales during the lockdown are corrected.Given that in 1Q20 economy grew by 1.6% y-o-y, it appears that in 1H20 it contracted by around 3.7% y-o-y. GKEM Analytica’s view, which forecasts a 4% GDP contraction this year, was not altered by Rosstat’s 2Q20 flash estimate. Moreover, the potential for an upside revision of the forecast became even stronger.Evgeny GavrilenkovAlexander Kudrin

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