The Central Bank has seen in the method of Rosstat the reason for the understatement of GDP data


Rosstat may underestimate consumer activity of Russians is the main indicator that provides insight into the dynamics of the economy as a whole. This opinion was expressed on Friday by the Department of studies and forecasting of the Central Bank. As a result, Russia’s GDP may actually be higher than estimated by Rosstat now, said the Central Bank in the latest issue of the review “what do the trends” (.pdf).

The reason of understatement of retail sales, “methodological characteristics”, according to analysts of the Central Bank. As an example of such a problem in the review is the situation with the dynamics of consumption in the second half of 2016. According to Rosstat, sales of food products in annual terms decreased faster than non-food sales. But it’s illogical, explains the Central Bank, because the fall of income and increase of uncertainty observed in the Russian economy, citizens primarily limit themselves are not commodities, but just in non-food goods, particularly durables.

Consumer activity in Russia has been declining for two years — at the end of 2016 fall, according to official data, amounted to 5.2%. “Dynamics of retail turnover is not very well correlated with data on the sales of certain categories of goods”, — said the Central Bank. The regulator has calculated its own index of retail sales compared with the index of physical volume of retail trade turnover of Rosstat and noticed that the discrepancy “is particularly high in 2016, which may indicate the overestimation of the depth of the fall of the total turnover of retail trade”. However, notes of the Central Bank, Rosstat still reviewing the data.

Rosstat estimates the dynamics of the total retail turnover using the deflator to adjust nominal turnover. In this case, an additional assessment for certain products, the Agency uses the balance sheet method (it takes into account the volume of exports and imports, change in inventories of products and production and intermediate consumption). But if you count balance method the General dynamics, it turns out that she is 2% above the dynamics of Rosstat, said the Central Bank. The cause of under-reporting may be the aim deflator, says the regulator.

The fact that Rosstat in the calculation of the deflator indicates the Central Bank does not take into account shares that last less than a week, while commercial networks tend to “impose shorter periods of discount promotions, which include, for example, stocks of the day, as well as constantly changing range of products sold at a reduced price”. The Agency anticipates, and the system of cumulative discounts. However, according to Nielsen, as of June last year, which focuses on the Central Bank, 19% of customers purchase more than half of the goods stock, while the share of goods of daily demand stock sales retailers is 35%.

Another problem is that the deflator does not account for changes in the product mix or consumer preferences: the list of items that experts Rosstat selected for monitoring during the year has not changed, although citizens may switch to cheaper brands. In this case, calculations using the deflator may show more modest gains.

Consumer activity has made “the largest negative contribution” to the dynamics of the economy, said the Central Bank. Thus, underestimation of retail sales can lead to an underestimation of total GDP. While Rosstat has already evaluated the dynamics of the economy in 2016 better than expected: Ministry of economic development had expected a fall of 0.6%, but Rosstat assessed at 0.2% (this indicates the Central Bank, was due to the improvement of data on gross fixed capital formation). The regulator also improved its Outlook for the economy. Previously, he was waiting for in the first quarter of this year GDP growth by 0.2–0.3% over the previous quarter and by 0.5% in the second quarter, now improved to 0.4 and 0.5 to 0.6%, respectively.

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