GDP in the second quarter of 2023 grew by 4.9% in annual terms

According to the first estimate of Rosstat in the second quarter of 2023, GDP grew by 4.9% in annual terms. This is 0.3 percentage points (pp) higher than the preliminary estimates of the Ministry of Economy and 0.1 percentage points higher than the Central Bank. The ministry noted that GDP growth exceeded the levels of both the second quarter of 2022 (thanks to a low base) and the second quarter of 2021, offsetting the corresponding decline. “The main drivers of growth were the sectors of the real sector, primarily the manufacturing industry, where output in the second quarter of 2023 increased by 11.3%. The machine-building and metallurgical complexes made the main contribution to the improvement of indicators, while growth was observed in almost all industries, ”said Polina Kryuchkova, deputy head of the department, noting construction and agriculture (plus 9.8% and plus 2.9%, respectively), wholesale trade (growth by 12.5%), “high investment activity”, “stable situation in the labor market and the associated growth in real money incomes of the population”.

Everything listed by Ms. Kryuchkova, however, makes sense only against the backdrop of the bottom point of the decline in 2022, which fell precisely on the second quarter. By the end of the second quarter of 2023, in terms of month to month, seasonally adjusted, economic growth, according to the ministry itself, actually zeroed out (see Kommersant on August 4). However, the increased assessment of Rosstat may slightly improve this picture. At the very least, analysts at the Solid Numbers Telegram channel now estimate GDP growth in the second quarter compared to the first quarter of 2023, seasonally adjusted at 0.8%. According to MMI channel analysts, growth in the same terms could be about 0.7% against 1% in the first quarter of 2023 and 1.8% in the fourth quarter of 2022.

Alexander Isakov of Bloomberg Economics notes that at constant prices, GDP in the second quarter of 2023 is only 0.3% above the peak of the first quarter of 2022 (if seasonally unchanged) and 0.5% below the pre-covid trend path of growth (by 1. 4% per year; see graph), and if not for the events of 2022, it could have been noticeably higher. However, if the current estimates of Rosstat do not change, and in the remaining quarters of the year, growth even turns out to be zero, Russia’s GDP will grow by 2.4% over the year. “These are preliminary estimates: new data can still change them,” Mr. Isakov nevertheless concludes.

Artem Chugunov