The HSE said the jam of the Russian economy at the bottom

Economic activity in Russia continues to be at minimal levels — although most of the activities in July showed an increase, “large negative contribution came from the reduction of the output of manufacturing industries”, indicated in a recent review of the “Comments on state and business” experts of the Higher school of Economics (HSE). The Russian economy is “still stuck at the bottom”, say they. This conclusion economists have made on the basis of the July statistics, which “brought contradictory news”.

In the second quarter of 2016, economic activity, according to the authors, decreased to may 2015, and the beginning of the third quarter as a whole did not bring an improvement. At the same time, in July, increased domestic private demand by 0.6% compared to the previous month, adjusted for seasonal factors. However, it looks modest against the background of falling [domestic private demand] 2.7% for the preceding three months,” the economists say. Thus, there is a trend in the decline in demand,” reads the review.

HSE experts note that in July improved slightly and consumer demand. This could be due to the increase in demand for non-food goods amid a rebound in the dollar from 63 to 66 RUB. (customers could make additional purchases in anticipation of a possible further weakening of the ruble. —).

Manufacturing, which largely influenced the stagnation of economic activity in July fell by 2.2%. compared to the previous month (seasonally adjusted). Thus processing close to the lows of the last two years. However, this could be due to “out of the box to the small number of working days in July, while in August this indicator can rebound, experts say.

The release of the industry — the most reliable indicator of the economy, according to the authors, decreased in July compared to the same period last year by 0.3%. This was the first time in four months. In the industry — and therefore the economy as a whole — is not observed “a clear signal” on the improvement of the situation is indicated in the survey.

Earlier, the Russian government admitted that at the end of the year in the country can be recorded economic growth. In particular, this was stated by Minister of economic development Alexei Ulyukayev. “I said that in the fourth quarter for sure (will economic growth) in the third — maybe Yes, maybe no, with equal probability, a small increase or a small decline,” he said earlier in the week (quoted by TASS). About the fact that by the end of 2016, GDP could rise on Thursday, August 25, said the head of Sberbank German Gref.

However, HSE experts believe that recovery growth and its subsequent acceleration in the Russian economy at the end of the year will not be. It seems more likely “scenario for the continuation of stagnation/recession before the end of the period of fiscal consolidation”. This is evident in the official data — the economy shows a decrease in six consecutive quarters.

In early August, the HSE said that the economy of Russia fell below the previous bottom. In their review emphasized that due to the compression of nearly all sectors of the economy struck bottom and went below it. The record fall was the construction that was indicated in the report.