The decline in Russia’s GDP in April 2022, according to the Ministry of Economic Development, amounted to 3.0% year-on-year after growth of 1.3% in March, 4.1% in February and 5.6% in January. This is stated in the Ministry’s review “On the current situation in the economy”. Growth of the Russian economy at the end of January-April 2022, the ministry estimated at 1.7% in annual comparison.

“Against the background of unprecedented sanctions pressure, the Russian Ministry of Economic Development estimates that GDP declined by 3.0% y/y in April after growing by 1.3% y/y in March. The main factors of GDP decline in April were transport and logistical restrictions, as well as a reduction in domestic demand”, – stated in the report of the Ministry of Economic Development and Trade.

The Ministry of Economic Development notes that among the basic sectors of the economy a significant decline was demonstrated by wholesale trade (by 11.9% y/y in April after a decline of 0.3% y/y a month earlier) and freight transport (by 5.9% y/y in April after growth of 3.6% y/y in March).

The volume of industrial production in April decreased by 1.6% in annual terms after growth of 3% in March.

At the same time, there was a significant worsening of the annual dynamics in the extractive industries (down by 1.6% yoy after growth by 7.8% yoy in March) due to the extraction of fuel and energy minerals. Manufacturing recorded a moderate decline of 2.1% y/y (after a 0.3% y/y decline a month earlier).

“At the same time, the situation in the manufacturing industries was uneven: on the one hand, there was a significant decline in the machine-building complex (primarily in the automotive industry), oil refining and a number of other industries. On the other hand, output continued to grow in the pharmaceutical industry, metallurgy, production of construction materials and other non-metallic mineral products,” the report says.

“A significant contribution to the GDP decline in April was also made by the reduction in consumer demand. The total turnover of retail trade, public catering and paid services, according to the estimates of the Ministry of Economic Development of Russia, decreased by 6.7% yoy in April (in March – growth of 3.3% yoy), primarily due to retail turnover,” – note in the Ministry of Economic Development of Russia.

“At the same time, in the construction industry and agriculture in April, the annual dynamics improved. The volume of construction work in April increased by 7.9% y/y after growth of 5.9% y/y in March. In agriculture, growth accelerated to 3.2% y/y in April after 3.0% y/y in March,” the survey said.

“Despite the decline in economic activity, the labor market situation remained stable in April. The unemployment rate in April updated the historical minimum (4.0% of the labor force after 4.1% a month earlier), as well as the number of unemployed (3.0 million people),” the ministry said.

The Central Bank expects (forecast from the end of April) a decline in Russian GDP in 2022 in the range of 8-10%, the Ministry of Economic Development forecasts a decline in the Russian economy in 2022 by 7.8% in the base variant and 8.8% in the conservative variant, it was reported earlier.

In turn, presidential aide Maxim Oreshkin said in the second half of May that the decline of the Russian economy will be much less than the current forecasts of the Ministry of Economic Development and the Central Bank and will not exceed 5% in 2022. “I have already told you about inflation (Oreshkin expects that by the end of 2022 inflation will not exceed 15%, with the Ministry of Economic Development forecast of 17.5% and the Central Bank’s forecast of 18-23%). Apocalyptic forecasts on the economy are still going on. We hear: [by] 10% of GDP will fall (in 2022), 15%, and in fact, according to my estimation, even in rather pessimistic scenarios, the decline in GDP will not exceed 5% this year,” Oreshkin said, speaking at the New Horizons forum on May 19.

The consensus forecast of analysts polled by Interfax in late April-early May on GDP decline for 2022 suggests a decline of 8.7%.

The RF Ministry of Economic Development expects the maximum depth of decline in the third quarter, and from the 4th quarter of 2022 – the beginning of a slow recovery (with seasonality cleared).

In 2023, according to the Central Bank’s forecast, Russia’s GDP will decline in the range of 0-3%, the Ministry of Economic Development expects a decline of 0.7%. The consensus forecast of analysts polled by Interfax at the end of April and beginning of May suggested a 1.4% growth in Russian GDP in 2023
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