Russian GDP grows 1.2% y-o-y in 3Q

RUSSIA ENERGY / FINANCE - In Brief 12 Nov 2013 by Marcel Salikhov

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According to preliminary Rosstat estimates, Russian GDP expanded 1.2% y-o-y in 3Q13 exactly the same pace as in 2Q13. That has almost matched earlier MED's estimate of 1.3% y-o-y for the quarter. MED estimated that in seasonally adjusted terms GDP declined -0.2% on q-o-q base in 2Q2013. There are no specific details on GDP growth components from Rosstat as they will be published later. We think that 3Q results put extra doubt on achieving revised official forecast of 1.8% for 2013. It was expected that economy should pick up in 2H2013 in order to achieve that target. Probably weaker than expected results were influenced by agricultural sector. In 3Q13 agricultural production grew only 1.6% y-o-y while much stronger results were expected. Investments in fixed capital continue to decline (-2.5% y-o-y for first 9 months and -2.6% y-o-y in September). Based and 3Q results and monthly data, we think that GDP growth in 2013 will be lower than 1.5% and closer 1.2-1.3% range. Some support for 4Q13 will come from growing household demand boosted by continued increase in wages (+8.2% y-o-y in real terms in September).