GDP growth rate driven by consumer demand in Q2

In 2019 Q2, the GDP growth rate increased to 0.9% (vs 0.5% in Q1). The Bank of Russia estimates that consumer demand remained the major driver behind the growth, as noted in the new issue of the information and analytical commentary ‘Economy: Facts, Assessments, and Comments’.

Generally, key economic activity indicators improved in July, although some of them adjusted after a more substantial increase in June. The expected adjustment of mechanical engineering output slowed down industrial production growth. Yet, it continues to demonstrate a gradual upward trend. Agricultural output considerably increased (partially because of earlier harvesting).

Economic growth is still restrained by the dynamics of real disposable household income and the persistent reduction in labour force.

The Bank of Russia forecasts that the implementation of national projects and higher public investments in Q3 will boost the GDP growth rate to 0.8–1.3%.