Although a detailed breakdown is not yet available, the VAT hike, rising inflation, downbeat sentiment and stunted export growth—due to a relatively warm winter in Europe and oil production quotas—likely all combined to stifle growth. Available data for the second quarter is mixed, with industrial production output surging in April while retail sales lost steam. Meanwhile, all eyes are on the upcoming OPEC+ meetings scheduled for late June and whether oil production cuts, which are currently set to expire, will be extended.
Russia Economic Growth
Growth is seen slowing notably in 2019 on dampened household spending and limited oil exports. That said, the economy should regain some momentum in H2 as inflation recedes, which would open the door for policy easing. Government spending on Putin’s “national projects” could boost the economy ahead, although reports suggests that the programs are off to a slow start. FocusEconomics panelists see growth at 1.4% in 2019, which is unchanged from last month’s forecast. In 2020, GDP is seen increasing 1.8%.