Russian growth at a snail's pace

RUSSIA / FSU POLITICS - In Brief 26 Jun 2019 by Alex Teddy
In May 2019 growth was only 0.2% Y o Y. This is eight and a half times lower than April's annual growth. A new head of Rosstat (the Russian Statistical Agency) was appointed a few months ago to provide more accurate statistics. Unfortunately these statistics are too accurate and are acutely embarrassing for the government. Q1 in 2019 growth has been a mere 0.5%. The surprising thing is that monthly figures have been up and down like a yoyo. The same is true of figures related to manufacturing. In May the manufacturing figure was -1%!The Ministry of Economic Development is upbeat saying that vigorous growth is just around the corner. It is unconvincing. The risk of war in the Middle East has raised oil prices so this may lead to a small upturn in the Russian economy. The increase in VAT and tightening of monetary policy partly explain the dismal figures for the first few months of 2019. The government said that a few of the national projects are beginning to come to fruition. Therefore these infrastructural projects will pay dividends in terms of contributing to economic growth.

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