The Ministry of Economics estimated GDP growth in May at 5.4%

The Russian economy grew in May by 5.4% compared to the same period last year, follows from the review of the Ministry of Economic Development “On the current situation in the economy.” Seasonally adjusted, Russia’s GDP rose 1.4% in May after rising 0.1% in April.

A month earlier, GDP grew by 3.4% (the ministry adjusted the estimate from 3.3%), in March, February and January it decreased by 0.7%, 2.6% and 2.7% respectively. According to the Ministry of Economy, in January-May, the growth was 0.6%. In the first quarter, the economy contracted by 1.8% compared to the same period last year.

GDP growth in May is associated, among other things, with the low base of last year (in May 2022, the indicator fell by 4.3%), the review says. According to the Ministry of Economics, the level of two years ago was exceeded by 0.6%. “The main support for the economy in May was provided by manufacturing, wholesale trade and the construction sector,” the ministry said in a commentary.

The growth of industrial production in May amounted to 7.1% in annual terms after 5.2% in April, follows from the data of Rosstat. The output in the manufacturing industry amounted to 12.8%.

According to the Ministry of Economy, the main positive contribution to the growth of manufacturing industries continued to be made by the machine-building and metallurgical complexes (+7.1 p.p. and +3.1 p.p., respectively). The growth of the machine-building complex in May amounted to 44.6% yoy after 14.4% in April. All sub-sectors of the complex demonstrate high performance: production of computer and electronic equipment (+31.5% yoy), electrical equipment (+49.5% yoy), motor vehicles (+86.3% yoy), attention in the ministry. The metallurgical complex in May also demonstrates an acceleration of growth – by 14.7% after 11% a month earlier.

The extractive industry in May grew by 1.9% after 3.1% a month earlier, follows from the data of Rosstat. In the construction sector, growth accelerated to 13.5% year-on-year after 5.7% in April.

In addition, according to the Ministry of Economics, consumer activity in May increased both compared to last year and to the level of two years ago. The total turnover of retail trade, public catering and paid services to the population was 8.8% higher than the level of the previous year.

According to the results of the year, Russia’s GDP may increase by 1.5-2%, Russian President Vladimir Putin said during the St. Petersburg International Economic Forum.

The official forecast of the Ministry of Economics assumes growth by 1.2%. At the same time, the head of the Ministry of Economic Development, Maxim Reshetnikov, noted that growth could be higher than forecast.