Rosstat published the first GDP estimate using the production method in the second quarter of 2023
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Rosstat published the first production-based estimate of GDP in the second quarter of 2023, confirming its growth at 4.9% in annual terms. The main contribution to it was made by hotels and restaurants (plus 15.2%, including public catering – 17%); construction (11.7%), wholesale and retail (11%) and processing (10.6%). “The increase in the volume of construction work is associated with the implementation of large investment projects,” Rosstat explains, consumption – with increased purchases of non-food and investment goods, and processing – with the production of electronics, optics, metal products, other transport and petroleum products.
Central Bank analysts in the September report “What Trends Are Saying” record a slowdown in GDP growth, taking into account seasonality, quarter by quarter to 0.1% in the second quarter after 0.7% in the first. At the same time, they believe that “the economy… has exceeded its potential level and after a period of recovery” will grow at a “more moderate pace,” including due to cooling external demand and a significant recovery in imports.
“The opportunities for rapid output growth in most industries have probably been exhausted,” analysts are convinced. The credit impulse, like the impulse of government injections, will cool, capacity utilization remains marginal, and the personnel shortage will continue to grow. In addition, “in the structure of GDP, the part not related to the production of goods and services that satisfy final consumer or investment demand has increased. This is another reason for the rapid growth of demand compared to the possibilities for the production of goods and services and increased inflationary pressure in the economy,” the Central Bank records. The quality of not only production, but also consumption has greatly decreased. “The assortment of goods in retail chains has almost recovered, but the demand for greater savings was reflected in a shift in the assortment from premium stores to the economy segment, a noticeable increase in the share of promotional goods and the average size of discounts, primarily in the non-food segment,” the regulator’s analysts note.
According to Bloomberg, on September 8, Prime Minister Mikhail Mishustin was presented with a new medium-term macro forecast, according to which GDP will grow by 2.8% in 2023, with growth slowing to 2.2% by 2026. However, the consensus regarding the foreseeable future of the Russian economy looks noticeably more modest (see chart).
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