The Ministry of economic development recorded a halt in the decline of the Russian economy

The downturn in economic activity in August has stopped, the monitoring of economic development. According to the Department, GDP growth in August was zero, after falling 0.8% in July. Seasonally adjusted GDP after stabilization in may-July, in August came in positive territory, amounting to 0.3 percent, stated in the document.

The positive dynamics of August slowed down the pace of the economic decline of Russia since the beginning of 2016. According to the MAYOR, in January—August, Russia’s GDP decreased at an annual rate decreased by 0.7%. During the first seven months of 2016 fall was estimated at 0.9%, reflecting the acceleration of economic decline in July, when the GDP declined in annual terms from 0.8 percent.

In monitoring the MAYOR noted the improvement in the industrial sector, where the main driver remains the chemical industry (+7.8% in August) and a slowdown of the decline in construction (from minus 3.5% in annual terms in July to minus 2% in August).

At the same time in the steel industry slowdown in the reduction of production not yet seen, said the MAYOR. In August, the volume of metallurgical production in Russia decreased year-on-year by 5.5, for the first eight months of the year — 2.8%.

“The main negative factor, hindering the growth of metallurgical production, continues to be the state in the construction and automotive sectors. Also, the negative impact of a negative external environment — low prices for metallurgical products in world markets, the global overproduction, tariffs from the EU on the Russian car”, — stated in the monitoring of the MAYOR.

The Ministry confirmed the deterioration of real incomes of Russians, the rate of decline which in August 2016 was the highest over the last seven years (-8,3%), which did not lead to a new failure in the retail trade. On the contrary, the rate of decline is slowed down (from minus 5.2% in July to minus 5.1% in August), and the volume provided to the population of paid services rose in August (+1%), reducing the total fall in January—August to 0.6%.

Earlier on Monday, analysts of the Russian Academy of national economy and public administration (Ranepa) and the Gaidar Institute said that the Russian economy has passed the “lower point of the current recession. At the same time, the experts noted that economic activity may remain low for several months, and to say that Russia is on a sustainable growth trajectory.