The Russian economy in 1H20: Strong rebound in some sectors in June, a few others to catch up

RUSSIA ECONOMICS - In Brief 17 Jul 2020 by Alexander Kudrin

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Rosstat reported that retail trade bounced back in June by 15.8% m-o-m (not seasonally adjusted) which pulled y-o-y figure to -7.7%, i.e., well above the initially reported -19.1% and -23.2% May and April figures. The 1H20 y-o-y tally was down by 6.4% with prospects of some recovery in 2H20. The non-food retail recovered strongly in June m-o-m so that in the aftermath of a contraction by 44.4% and 29.2% y-o-y in April and May, the June y-o-y figure looked somewhat better (down by 11.3%). Strong recovery was also recorded in the food segment, as food retail sales were reportedly down in June by 3.7% y-o-y. Meanwhile, we at GKEM Analytica mentioned previously that neither in April nor in May, food retail contracted as much, as was reported (by around 9% y-o-y each month) as the production of an absolute majority of food products, particularly fresh food, was strongly up. Hence, some questions on the reliability of published data remain unanswered. Statistics may be revised up at some point - for instance, on the back of possible upward revision of under-reported online food deliveries. In any case, recently published statistics indicate that the consumer market is on a recovery path, and overall contraction of the household consumption will be limited this year.Agriculture is looking up, having recorded 3.0% y-o-y growth both in June and in 1H20. Construction activity rebounded in June as well, so that contraction was just one-tenth of a percent, while the 1H20 tally was down by a mere 0.5% y-o-y, with prospects of ending up in positive territory in 2020 as a whole. Freight transportation services were down by 9.5% and 6.0% y-o-y in June and 1H20 – not least due to decre...