Economy continues to grow in February

The Russian economy continued to expand in February, with the scale of expansion being close to its potential. These are findings of ‘Economy: Facts, Assessments and Comments’, the new issue of a regular Bank of Russia commentary.

Manufacturing output expansion proved broad-based, with gains reported in outputs of raw materials, intermediate and investment goods, and food products. Estimates suggest annual GDP growth will come in at 1-1.5% in 2019 Q1 and 1.2-1.7% as of year-end.

The rise in output was further evidenced by surveys. Rising production volumes were confirmed by IHS Markit (PMI) survey respondents. According to a Bank of Russia business survey, economic conditions saw improvements in the manufacturing, electrical energy, and retail sectors. Business sentiment improved across all federal districts.

February saw muted consumer activity. The labour market was close to an equilibrium state. Current consumer demand movements and labour market conditions create no excessive inflationary pressure.