The Russian economy in August: slow recovery continues

RUSSIA ECONOMICS - In Brief 18 Sep 2020 by Alexander Kudrin

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Rosstat reported that in August, the economic recovery continued across the board, albeit slowly. Most of the indicators looked better y-o-y than in July, especially taking into account that this year August had fewer working days than a year ago. Some previous data have been revised up slightly, implying that Rosstat tries to take into account previously unrecorded economic activity in some sectors, such as retail or transport. Given that the revisions seem to be yet unaccomplished, referring to seasonally adjusted figures may be misleading, particularly in the case of August.In August, agriculture was up by 4.4%, y-o-y, which brought the 8m20 tally to 4.2% y-o-y. Freight transportation was still down by 5.2% last month versus 8.3% in July so that the 8m20 tally was down by 6.2% (all figures are y-o-y as well). Retail sales contracted by 2.7% and 5.1% y-o-y in August and 8m20. It is still questionable whether food retail has indeed contracted by 4.1% in August and 2.3% in 8m20 as is currently reported. As mentioned, Rosstat keeps revising previously published data step by step. Non-food retail sales bounced back in August and were down by 1.2% y-o-y only, but due to a very deep contraction in 2Q20, the 8m20 tally was still down by 7.8% y-o-y.Contraction activity remained rather flattish, having contracted by a mere 0.5-0.6% y-o-y in both periods.These numbers do not alter GKEM Analytica’s 2020 macroeconomic forecast, neither do they affect the 2021 outlook.Evgeny GavrilenkovAlexander Kudrin