Economic performance set to stabilize in 2H25

RUSSIA ECONOMICS - In Brief 26 Jun 2025 by Evgeny Gavrilenkov

---

Rosstat reported that in May and 5M25, Russian industrial output grew by 1.8% and 1.3% y-o-y. The mining segment contracted by 1.1% and 2.7%, while the manufacturing grew by 4.0% and 4.2% (y-o-y in May alone and 5M25 in both cases). Even though y-o-y numbers looked unimpressive compared to last year’s performance, seasonally adjusted industrial output grew by 2.6% m-o-m in May, following the 1.0% m-o-m growth in April. Meanwhile, the recently published industrial statistics appeared puzzling as in January 2025, seasonally adjusted industrial output fell by a very atypical 3.3% m-o-m, following the equally unusual 2.4% m-o-m growth in December 2024. As Rosstat keeps revising historical data we cannot rule out that at some point it will happen with 2024-2025 industrial statistics, and the trend will look smoother. Interestingly, recently published national accounts also point to a deeper than usual Q-o-Q GDP contraction in 1Q25 (by 0.6% in seasonally adjusted terms) that occurred amid 1.1% Q-o-Q growth in 4Q24. On top of that, the 1Q25 GDP contracted amid its strong Q-o-Q growth in 1Q24, i.e., against a high base. It looks as though GDP will resume Q-o-Q growth in 2Q25 in seasonally adjusted terms as hinted by the recently published industrial statistics. In a few days, Rosstat will publish its usual set of monthly macroeconomic statistics for May and we’ll come up with some updates. Rapidly decelerating inflation can provide some additional support for economic growth as odds for lower CBR’s key rate increase. In the seven days ending on June 23, weekly inflation remained at 0.04% w-o-w, i.e., the same as in previous weeks. The MTD and YTD tallies climbed to 0.12% and 3...