RBC: Rosstat revised the trajectory of the decline in GDP after seasonal adjustment

The recalculation by Rosstat of the picture of the decline in the Gross Domestic Product (GDP) of Russia in 2022 after seasonal adjustment showed that there was no technical recession, writes RBC with reference to the updated data of the statistical office.

Previous data showed a decrease in GDP in the I quarter compared to the previous one by 0.34%, and in the II quarter – by 1.95%. According to the updated, seasonally adjusted data, there was no contraction in the economy in the first quarter, and in the second it amounted to 5.25%. In the third quarter, GDP grew by 0.45% compared to the previous one. It follows from this that there was no technical recession, which means two quarters in a row to the previous one.

The recalculation touched exclusively on the series of GDP with the exception of the seasonal factor, RBC emphasizes, the dynamics of GDP and the initial data on the physical volume of GDP have not changed. The new Rosstat estimates are close to those of the Central Bank, which showed a 5.8% fall in GDP in the second quarter after seasonal adjustment and an increase of 0.2% in the third.

To smooth out seasonality, Rosstat uses the Demetra software package with the TRAMO/SEATS algorithm developed by the National Bank of Belgium. Experts interviewed by RBC note that the seasonally adjusted Rosstat data is closer to the economic picture than the previous ones.

The Ministry of Economics previously predicted a fall in Russia’s GDP by 2.9% at the end of the year, and in 2023 – already by 0.8%. In subsequent years, GDP growth is expected to be 2.6% per year. On Wednesday, December 14, Rosstat updated its estimate of the fall in GDP in the III quarter from 4% in annual terms to 3.7%, and for January-September – from 1.7 to 1.6%. In the II quarter, the decline in the economy was at the level of 4.1%. In January-March, according to Rosstat, GDP growth amounted to 3.5%.

At the same time, on December 15, Russian President Vladimir Putin said that by the end of the year, a decline in GDP by about 2.5% is forecasted. The main reason for the improvement in the forecast could be a revision of the GDP estimate for the third quarter, noted experts interviewed by Vedomosti.

In October, World Bank analysts predicted decline in Russia’s GDP by 4.5% in 2022 and by 3.6% in 2023. Among the most significant negative factors affecting the Russian economy, they identified sanctions, the exodus of foreign companies, the uncertainty of prospects and the fall in real incomes of the population, eroding consumer demand. In 2024, the economy may already return to growth, the WB believes.