The Russian economy grew 1.3% in the first quarter, should we rejoice?
According to Rosstat, published the preliminary assessment of growth rates of Russian GDP for the first quarter of 2018. The index of physical volume of GDP of our country increased from January to March by 1.3% yoy.
In principle, these data can be interpreted ambiguously. On the one hand, the growth rate of the Russian economy remain modest to the Chinese results, we are still very far away. On the other hand, the visible progress. If in the I quarter of 2017 (recall that 2017 was the first year growth of the US economy after the crisis), Russian GDP grew only by 0.5% yoy and in the first quarter of 2016, Russia’s GDP fell at an annual rate of 1.2%, in January-March this year, the Russian economy shows strong growth.
It is also important to note that in the pre-crisis quarters of 2013 and 2014 Russia’s GDP grew at an annual rate of 0.8% and 0.9% respectively. Thus, in the pre-crisis years was more reason to talk about economic stagnation than in 2018, and the point was not only in the growth, but in their cause: the substitution is then still not fully worked, Russia relied mainly on revenues from hydrocarbon exports.
But this year, it is too early to rejoice in the growth rate of 1.3%. The economy could grow more, but the growth was restrained and overly cold March which had a negative impact on the construction industry, and reduce oil production within the OPEC agreement+ that has a negative impact on the oil industry in engineering and metallurgy.
Although Rosstat has not provided the structure of GDP for the first quarter of 2018, and is no detailed information about which industries have been engines of growth, and which held back growth, but it can be assumed that the main driver was the services sector and production of consumer goods. And this is especially important as Russia has embarked on import substitution.
The Deputy Director of analytical Department,