Russia’s investment, base sectors weak in October.

By bne IntelliNews November 20, 2013

RosStat’s report on October, base sectors and other fundamental indicators shows the continuation of the negative stagnation trend seen since H1/13. Capital investment continued to be negative: declining by 1.9% y/y in October alone and by 1.2% y/y in Jan-Oct 2013 overall (vs. EconMin’s expectations of 2.5% growth in 2013).

Industrial output continued to fluctuate around 0% growth, slipping by 0.1% y/y in October. Transportation turnover recovered in September and October to 1.8% y/y and 6.3% y/y growth, which was not in line with the data on stagnating industry. Same as in the previous month, transportation was supported in October by 11% y/y increase in pipeline transportation. We assume that this was due to Rosneft starting additional oil supplies to China as of August. Railroad transportation associate with manufacturing, on the other hand, posted weak growth of 1.4% y/y in October and 2.2% y/y decline in Jan-Oct 2013 overall.

Construction continues its y/y decline, decreasing by 3.6% y/y in October and 1.4% y/y in Jan-Oct overall. Agriculture soared by 26% y/y in October after declining by 1.4% y/y in September. At least part of this unexpected jump can be attributed to low base: in October 2012 agricultural output dropped by 15% y/y.

While domestic demand remains the key driver of waning Russian growth in 2013, retail trade growth bounced back slightly in October: it increased by 3.5% y/y vs. 3% y/y in September, but still remained below 4% seen in August. Non-food retail sales advanced at a slightly steeper pace than food in October. In Jan-Oct overall, retail trade gained 3.8% y/y vs. 6.7% y/y growth for the same period of last year.

Should retail trade and extraction continue recovering in Q4/13 Russia’s GDP growth could converge to the current forecast of 1.8% y/y. This forecast was already revised twice from the original 3.7%. Currently the GDP growth for Jan-Oct 2013 is estimated at 1.3% y/y by RosStat, slowing down 3-fold from 4% y/y seen for the same period of last year. 

Base Industries (%, y/y) 2009 2010 2011 2012 Dec-12 Jan-13 June Oct
Industry -9.3% 8.2% 4.7% 2.6% 1.4% -0.8% -0.7% -0.1%
Construction -13.2% -0.6% 5.1% 2.4% 1.6% 1.4% 6.1% -3.6%
Agriculture 1.2% -21.9% 23.0% -4.7% 1.4% 2.5% 5.8% 26.3%
Transport -10.1% 6.9% 3.4% 1.7% 0.9% -0.7% -1.1% 6.3%
Retail -5.5% 6.3% 7.2% 5.9% 5.0% 4.2% 4.3% 3.5%
Source: RosStat                

Related Articles

China’s LNG imports slump for eighth month

China’s LNG imports have fallen on a year-on-year basis for the eighth consecutive month, Bloomberg reported on June 26 citing data from Kpler. Imports of the super-chilled fuel in the world’s ... more

Russian bomber crashes in Mali amid escalating conflict

A Russian-built Su-24M bomber operated by the Africa Corps crashed into the Niger River near Gao, Mali, shortly after an armed confrontation with separatist forces, representing a significant setback ... more

Russia to deepen ties with Africa in defence and investment, says Putin's spokesman

Russia intends to expand its cooperation with African countries significantly, placing particular emphasis on economic investment and security collaboration, Presidential Press Secretary Dmitry ... more

Dismiss