September statistics bring no surprises

RUSSIA ECONOMICS - In Brief 02 Nov 2022 by Alexander Kudrin

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Rosstat reported that output of the five basic sectors (industry, agriculture, construction, transport, trade) was down y-o-y by 3.5% and 0.8% in August and 9M22. Some sectors, such as agriculture, construction, and paid consumer services, performed relatively well, having grown by 5.2%, 5.2%, and 3.7% y-o-y in 9M22. They grew y-o-y in September also (by 6.7%, 5.8%, and 0.6%, respectively). Some other sectors (retail sales and transport, for instance) were visibly down. Retail sales dropped y-o-y by 9.8% in September and 5.5% in 9M22. In general, these trends match expectations of a relatively moderate GDP contraction this year, i.e., look similar to industrial statistics, where one can see no signs of a tipping point that could mark an upturn. Rosstat also reported that weekly inflation in seven days ending on October 31 was at 0.07% w-o-w. Inflation MTD reached 0.23%, and YTD inflation climbed to 10.71%. The official print of monthly inflation, calculated on a broader consumption basket, should be close to the aforementioned 0.23% and will indicate that inflationary pressure remains moderate. By year-end, inflation will fall below 12%. The CBR is very much concerned by the geopolitical risks and was reluctant to cut the key rate. As risks can only rise, one should not expect further rate cuts by the regulator. Evgeny Gavrilenkov Alexander Kudrin