The Ministry of economic development estimated semi-annual decline in GDP

For the first six months of 2016, gross domestic product (GDP) in Russia declined 0.9%, while in the second quarter, the pace of economic decline slowed to 0.6%, follows from the published on Thursday data the Ministry of economic development (MED). In prepared by the office of the monitoring of socio-economic development of the country it is reported that the country’s GDP with each passing month fell more slowly, so that in June the rate of decline slowed to 0.5%.

“While the seasonally adjusted decline in GDP is almost stopped (in April it amounted to minus 0.2% in may to minus 0.1% in June 0%)”, — the document says.

The situation in the Russian economy analysts, the MAYOR estimated more optimistic than the experts of Vnesheconombank. According to the estimates of the last of the country’s GDP in April-June 2016 decreased by 0.7% and in June by 0.6%. While cleared of seasonality, the result of June, the VEB was positive: according to the chief economist of VNESHECONOMBANK and former Deputy MAYOR Andrei Klepach for the month, GDP grew by 0.1%.

“GDP growth in June mostly associated with industrial production and is of compensatory nature after a decline in may,” — said Klepach.

According to the MAYOR, the main impact of the slowdown of economic recession in the second quarter had industrial production, transport and agriculture.

“The June data on industrial production indicates a certain improvement of the situation: the seasonally adjusted figure, calculated by the Ministry of economic development, rose by 0.3%, month-to-month. Marked increase in all three components: mining and quarrying rose 0.1 percent, manufacturing showed a growth rate of 0.5%, production and distribution of electricity, gas and water grew by 0.2%,” reads the report.

Especially quickly, according to the MAYOR, increases the production of the food industry, the success of which the Department associated with the program of import substitution. In particular, the vegetable oil production in June on an annual basis grew by 33%, meat and by — products- by 15.5%.

At the same time, analysts the MAYOR noted that in certain sectors the situation remains difficult. In particular, in June was recorded a “negative turn” in the production of passenger cars in may, the number released in Russia of cars rose at an annual rate of 4.1 percent, but in June fell by 5.3%. Overall, in January—June 2016 the production of cars in Russia decreased by approximately 18%.

“In construction, the situation remains dramatic in scope of works by the form activity “Construction” declining for the fourth month in a row (-9,7%, year-on-year in June, with the seasonally adjusted index shows a similar trend of accelerating decline. The recession in the industry all the same due to the low internal, external and investment demand,” — noted in the monitoring of the MAYOR.

Serious pressure on the economy continues to have a low level of consumer demand due to the continued reduction of incomes of the population. Going back in 2014, “savings behavior model”, the Russians are in no hurry to snap out of it. They are still trying to postpone and less to spend, especially on luxury items and expensive products. All this, according to the MAYOR, is likely to further reduce retail turnover during the six months it was reduced (annualized) 5.7%.

As actively refuse the Russians and optional services. For example, the amount given to the Russians health and fitness services for the six months decreased by 6.8% and of tourist services — from 11.4%. The red turned out to be virtually all types of household services, it is hardly the only exception was services for the repair and maintenance of household appliances is the fact that before the crisis the Russians just threw, now fixed.

“Reduction of services in June increased to 2% in annual terms, which led to their decline in the first half as a whole by 0.9% compared to the corresponding period of the previous year”, — emphasized in the monitoring of the MAYOR.

On Wednesday, Klepach also pointed to the resumption of the decline in demand of Russians for paid services, expressed the hope that in the third quarter of 2016 to pull the economy out of recession, which continues for eight consecutive quarters, it will be able to consumer demand.