​October statistics look better than expected – despite some restrictions returned

RUSSIA ECONOMICS - In Brief 20 Nov 2020 by Alexander Kudrin

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Rosstat reported that in October, the retail sales continued to catch up, and after an increase by 2.1% m-o-m, they were down by a mere 3.8% y-o-y that month and by 4.6% y-o-y in 10m20 (here and below m-o-m rates are not seasonally adjusted). Construction remained nearly flat y-o-y both in October and in 10m12 (0.1% and 0.3% respectively). Construction activity remained unaffected by the restrictions imposed in the aftermath of the growing number of newly infected people. However, consumption of consumer services in October fell by nearly 0.9% m-o-m, which meant contraction by 13.4% y-o-y, which brought the 10m20 tally down 13.4%. Output in the transportation sector increased in October by 5.2% m-o-m and by 0.4% y-o-y, while the 10m20 figure was still down by 3.2%.At a glance, October statistics looked encouraging as the full-year growth numbers in the sectors mentioned above won’t differ much from the 10m20 tallies. In some segments, such as retail sales, October statistics looked better than expected. A relatively strong start of the last quarter of the year will also mean good numbers next year – assuming other factors being equal. On aggregate, October statistics were generally in line with GKEM Analytica’s earlier expectations of a relatively moderate GDP contraction this year (by 3.7-3.8%). Moreover, there are growing chances that in 2020 GDP may contract even less than that - in the aftermath of upward revisions of some of the previously published statistical data. Early next week, GKEM Analytica will come up with the updated 2021 forecast and, potentially, with the revised estimates of the 2020 results.Evgeny GavrilenkovAlexander Kudrin