Industrial output in Russia ends 2017 with 1.5% decline in December

Industrial output in Russia ends 2017 with 1.5% decline in December
Industrial output in Russia ends 2017 with 1.5% decline in December
By bne IntelliNews January 24, 2018

Russia's industrial output ended 2017 on weak note, declining by 1.5% year-on-year in December after a record-high drop of 3.6% in November, RosStat statistics agency said on January 23. In seasonally adjusted month-on-month terms the output in December inched up by 0.4%.

Industrial output in 2017 overall underperformed at 1% growth, remaining the same as seen in 2016 and much below the Ministry of Economic Development target of 2%.

December's indicator was a negative surprise, as the analysts surveyed by Reuters expected zero growth in the last month of the year and 1.2% growth for 2017 overall. The consensus forecast for 2018 is currently 1.7%.

Extraction in December declined by 1%i in y/y terms, same as in November. Manufacturing in December posted 2% y/y decline versus 4.7% y/y drop in the previous month. 

Weak ending to 2017 was attributed to the extension of the Opec+ oil cuts, warm weather, stronger ruble, and high base of 2016.

Vedomosti daily on January 23 cited the Center of Macroeconomic Research and Forecasting (CMAKP) as claiming that Russian industry is in recession since mid-2017, after a bump in the second quarter due to unusually cold spring and extra working day in May. 

Chief economist of Russia's development bank Vnesheconombank Andrei Klepach estimated that since June value added in industry overall declined by 4% and in manufacturing by 5%, according to the daily.

In the fourth quarter all components of the industrial output declined, with extraction down by 0.7%, manufacturing by 2.2%, electric utilities by 4.7%. 

The situtation is unlikely to drastically improve as large industrial producers are "on hold" before the March 2018 presidential elections waiting for Kremlin's moves on taxation and other reforms.
 

Data

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