August did not find arguments for growth – Newspaper Kommersant No. 180 (7381) of 09/29/2022

Preliminary macroeconomic data from Rosstat on the state of the economy in August confirm the transition from the recovery phase of output to at least a period of stabilization, as well as to the fading of the previously recorded surge in private consumption. This, we note, was indicated by leading indicators of the state of the economy (see Kommersant of August 13 and 16). According to Rosstat, the annual output growth rate in basic industries stabilized at the level of July, demonstrating an increase of just over 4%. According to the Ministry of Economy, in August the decline in GDP amounted to 4.1% against 4.3% in July and 5% in June (see “Today’s Number”).

In August, seasonally adjusted intra-annual dynamics, according to statisticians, changed direction in many industries. Relative to the average monthly value of 2019, the growth rate of output in the industry slowed down for the first time since April of this year. In production in August, the indicator decreased for the second month in a row, in processing it remained relatively stable. The dynamics of output in agriculture has not changed since the beginning of 2020 and is steadily at the pre-Covid level. Turnover in the transport sector is below the average in 2019 by 24%, in retail (after the collapse in May) is 5% below this level. The turnover of paid services has been growing since May, demonstrating an increase of 5% in August. In the wholesale trade, the collapse continues, which, against the backdrop of a low level of retail demand, continues to exert the main downward pressure on GDP (see Kommersant of August 12) – in August, turnover here was at a historically low level, lower than the average monthly indicator of 2019 by 17% (see graph).

According to the Ministry of Economy, private demand (the sum of retail turnover, paid services and catering) in August decreased by 5.9% in annual terms against 6.1% in July. First of all, this happened due to the improvement in the dynamics of paid services and public catering against the backdrop of stabilization of changes in real wages, growth in lending and a decrease in unemployment. According to the CMASF, the increase in private demand in August, seasonally adjusted, slowed down to 0.6% from 1% in July. In September, most likely, demand will be further supported by the indexation of salaries for state employees and worsening inflationary expectations, but in October-December, a new collapse is possible.

Artem Chugunov