Economic growth gradually turns positive y-o-y in most sectors

RUSSIA ECONOMICS - In Brief 20 Apr 2021 by Alexander Kudrin
As was generally expected, most of Russia’s monthly indicators improved in March and posted positive y-o-y growth. This growth will strengthen in the coming months due to a low base effect in 2Q20. The only exemption in March was retail sales as y-o-y growth remained negative due to a high base in March 2020 (preemptive purchases of goods ahead of anticipated restrictions and expected decline of the ruble). In April 2021, retail sales will bounce back strongly and will head toward an impressive growth in 2021 as a whole (likely by over 7.0%). So far, retail sales were down in March and 1Q21 by 3.4% and 1.6% y-o-y.Agriculture and construction y-o-y growth remained sluggish – slightly above zero, namely, within the range from 0.2% and 0.4% in March and 1Q21. As opposed to expected strong growth in industry and consumer sectors (such sectors as retail sales and paid services), agriculture and construction won’t impress in 2021 as a whole. Amid recovering industrial growth (a short note on this issue was released by GKEM Analytica last week) and retail sales, freight transportation also continued to recover as well. It grew by 3.9% and 0.4% y-o-y in March and 1Q21. After a plunge in 2020, consumer services bounced back in March (by 1.4% y-o-y but were still down in 1Q21). In 2Q21 and 2021, as a whole, consumer services will deliver a double-digit rate of growth.All in all, these numbers remained more or less in line with GKEM Analytica’s expectations.Evgeny GavrilenkovAlexander Kudrin

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