2018 GDP on course to post 1.5%-2% growth – close to upper forecast range

The Russian economy is on course to post growth between 1.5% and 2%, which is close to the upper bound of the Bank of Russia’s forecast range. This estimate takes into account Rosstat’s upwardly revised construction volumes for 2018, notes the new issue of ’Economy: Facts, Assessments and Comments’, a Bank of Russia commentary.

Core production, investment, and consumption indicators in 2018 performed moderately and overall proved consistent with Bank of Russia forecasts. The year saw industrial production expand 2.9%, with the mining sector having turned in the strongest growth (4.1%). External demand emerged as the key factor behind rising outputs of oil, gas and coal and several metallic ores.

Growth in fixed capital formation in 2018 may prove slightly higher than the Bank of Russia forecast (1.5-2%), while the growth pace of households’ spending on final consumption may well move closer to the lower bound (2.5-3%).

Last year's real wages posted 6.8% growth, which is aligned with the Bank of Russia forecast (7-8%). The average rate of unemployment was 4.8%, which is an all-time low. This was facilitated by rising demand for labour.