Russian industry decelerates sharply in January

RUSSIA ECONOMICS - In Brief 27 Feb 2025 by Evgeny Gavrilenkov

---

Rosstat reported that the industrial output was up by 2.2% y-o-y in January, which appeared unexpected as it was up by 8.2% y-o-y in December. Seasonally and calendar-adjusted industrial output contracted by 3.2% m-o-m. It might be too early to say that growth trends changed abruptly last month, as the budgetary spending spree in December was enormous. In January, it also remained generous. Still, the manufacturing segment, the key beneficiary of the budget stimulus these days, decelerated sharply, as well, from 14.0% y-o-y growth to 7.0% y-o-y in January. The mining segment contracted by 2.1% y-o-y last month, following 1.8% y-o-y growth in December. Production of many goods posted significant y-o-y contractions. In other cases, growth continued. For example, production of cars grew by 20.2% y-o-y while production of other vehicles surprisingly fell by over 30% y-o-y last month. Production of many consumer durables was also down in January. It is obvious whether January’s industrial statistics hinted at the beginning of an abrupt change in the overall growth trajectory or was mostly a statistical effect resulting from ongoing revisions of historical quarterly national accounts so that monthly economic statistics couldn’t remain unaffected. Rosstat will soon publish other monthly data for January, such as retail sales, construction activity, etc., and that will be a better time to come up with a more weighted conclusion about the current economic trends.