The decline in the economy slowed to the lowest in a year and a half

In the second quarter of 2016, Russia’s GDP decreased at an annual rate of 0.7 percent, according to the report of analysts of Vnesheconombank (VEB). Compared to the previous quarter’s GDP contraction slowed sharply (minus 1.2 percent) in the second quarter of economic decline was the lowest in last six quarters. For comparison, in 2015, the quarterly decline in GDP ranged from 2.8% to 4.5%.

Compared to the first quarter of 2016, Russia’s GDP in April-June declined by 0.1%. At the same time, in June, the GDP, exclusive the seasonal factor has increased, according to the VEB, by 0.1%, due primarily to positive results for the development of industry and transport.

“In June, the economic dynamics had improved somewhat, partially offsetting the decline in may. We estimate that GDP was 0.1% higher than in the previous month, after declining in may by 0.3%. GDP growth in June, for the most part, associated with industrial production and is of compensatory nature after a decline in may,” — said the chief economist VEB Andrei Klepach.

He also noted that a “fracture of the negative trends in the economy” to speak while early, as in engineering continues to decline in production of vehicles and equipment, and the decline in construction contributes to the continuation of a protracted decline in the production of building materials.

“Bad things with consumer demand. Can not stop the prolonged decline in retail sales in June made up for 9 consecutive months. In the second quarter resumed the decline of demand for paid services. The fall of real wages and real disposable incomes, seem to have reached bottom,” — said Klepach.

Chief economist VEB expressed the hope that in the third quarter of 2016 to pull the economy out of recession, which continues for 8 consecutive quarters, it will be able to consumer demand.