Russian economic growth decelerates in Q3 2017

The Russian statistics agency released the preliminary data of the real GDP growth that shows that the Russian economy expanded 1.8 percent year-on-year in the third quarter. This is a slowdown from the second quarter’s 2.5 percent rate and below consensus expectations of 2 percent growth.

Monthly data released earlier gives some insights into the underlying drivers of the Russian economy currently, noted Wells Fargo in a research report. The strength in retail spending probably signifies that growth in real personal consumption expenditures likely stayed strong in the third quarter.

In the third quarter, the industrial production in Russia decelerated to around 1 percent from 4 percent year-on-year in the second quarter. Growth in value of exports downshifted slightly in the third quarter; therefore some of the quarter’s deceleration might be due to exports.

However, global economic growth has been resilient in the past few quarters, so it is doubtful that growth in real exports would have decelerated too much, stated Wells Fargo. Investment spending, in the meantime, seems to be another factor for the slowdown. It weakened considerably in 2014-2016 recession.

“Our forecast looks for the Russian economy to eke out real GDP growth rates of roughly 2 percent per annum in 2018 and 2019”, added Wells Fargo.

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest