VEB and statistics diverged in the assessment of the fall of the economy in 2016


By the end of 2016, Russia’s GDP decreased by 0.5%, according to monthly operational assessment of Vnesheconombank (VEB). Calculations of VEB does not coincide with the data of the Ministry of economic development and Rosstat: statistical office reported earlier that the economy for the year decreased by 0.2% and the Ministry estimated a decline of 0.6%.

In December, according to the Bank, GDP decreased by 0.2% compared to December last year, the fall occurred after rising 0.5% in November. Compared to November, the economy contracted by 0.1% (with the exception of seasonality). Quarterly dynamics of hovering around the zero mark — the national Bank, economic activity declined by 0.1% compared with the fourth quarter of last year and has not changed compared to the third quarter of 2016. “The Russian economy for three consecutive quarters shows a positive or neutral dynamics of GDP corrected for the seasonal effect. According to the traditions of analysis of the economic situation, it indicates the end of the recession and the transition to recovery”, — States the message of the Bank the word Bank’s chief economist Andrei Klepach. But economic growth has not yet become sustainable, he admits.

Rosstat the dynamics of GDP at the end of last year estimates more optimistic — according to him, published on 1 February, the economy contracted by 0.2%. It is “significantly better than expectations of market participants, forecasts of the Central Bank, the Ministry of economic development and analysts,” writes in his review on Thursday Raiffeisenbank. Revised the Agency and the fall of GDP in 2015 from 3% to 2.8%. “However, the main reason for this is the change in the methodology and refinement data for the years 2015-2016, in particular, to mitigate the decline in GDP was helped by the inclusion of costs for the purchase of military equipment, not previously accounted for as investments in fixed capital,” said Raiffeisenbank.

Rosstat data for the fourth quarter is not yet published. However, annual statistics indicates that in October—December the economy grew by 1.1% year-on-year after seven quarters of decline in a row, wrote in the review, Citi analysts. The results of the year not associated with improved quarterly performance, the reason for the revision of historical data, objects Sberbank CIB, remarked: “In 2016 there has been some positive dynamics in industrial production and the agricultural sector, but the decline in trade and the construction sector did not stop”. According to Rosstat, retail trade turnover for the year dropped by 5.2% (consumer activity is traditionally considered the main criterion of the rise or fall of the economy as a whole), the real income — 5.9%, construction — by 4.3%. But increased the index of industrial production (+1.1%) and turnover (+1.8%) and agricultural products (+4.8 percent). One of the most important factors that caused the decline of the economy — the decline in household spending by 5%, according to Sberbank CIB. The negative trend in consumer spending will soon have to stop, as evidenced by the reduction of unemployment, believes Klepach.

Another evaluation of GDP dynamics was given earlier to the Ministry of economic development, according to him, the economy in the past year decreased by 0.6%, which coincides with the official forecast of socio-economic development, which was prepared by the Ministry and which formed the basis of budget calculations. In 2017, the Ministry predicts the growth by 0.6%, but this forecast sees oil prices at only $40 per barrel. At the same time in January, as reported by the Ministry of Finance, the average price of Russian Urals oil amounted to $53,16 per barrel, which was 1.8 times higher than last January. In 2017 the economy will grow by 1.7%, writes in a review on Thursday, ING, Raiffeisenbank expects growth of 1%. During most of the year, “the economic dynamics in Russia will be sluggish, although in the second half there may be some recovery after another reduction in the key rate of the Central Bank”, according to Sberbank CIB. The optimistic forecast for GDP during the Davos forum gave the first Deputy Prime Minister Igor Shuvalov, according to him, the economy for the year will grow by 1-2%.

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