No surprises in October

RUSSIA ECONOMICS - In Brief 30 Nov 2022 by Alexander Kudrin

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Rosstat reported that in October, the output of the five basic sectors was down by 3.2% y-o-y in October, which is a bit better than in September (down by 3.5% y-o-y). In 10M22, this output was down by a mere 1.1%, heading toward around a 2.0% contraction in 2022. Generally, it looks as though Russia’s economic performance improved in October, but only slightly, and the performance continued to be quite uneven across segments. For instance, seasonally adjusted (by Rosstat) industrial output economy grew by 0.7% m-o-m in October, and in 10M22, it was still up by 0.1% y-o-y. The industry is heading toward a very moderate contraction in 2022 – by less than 1.0%. Even though the mining segment was down in October by 2.7%, it was still up by 1.4% in 10M22 (both numbers are y-o-y). Manufacturing was down by 3.2% and 0.7% y-o-y in October and 10M22. Production of cars was down y-o-y by around two-thirds y-o-y in 10M22.Construction posted better results, having grown by 9.6% in October and 5.8% in 10M22 (both y-o-y). Construction is heading toward over 5.0% growth in 2022 as a whole. On the contrary, the trade sector was most affected by the geopolitical changes as retail sales were down by 9.7% y-o-y in October and 5.1% y-o-y in 10M22. Sales of consumer durables were hit most strongly (down by over 10% in 10M22). At the same time, paid services were up by 3.5% y-o-y in 10M22. Wholesale trade was consistently down by over 20% y-o-y in recent months and 13.6% in 10M22. Overall, the October statistics didn’t surprise, and the economy is seemingly heading to around 2.5% GDP contraction this year.Inflation started to accelerate w-o-w, and in seven days ending on November 28, it wa...