Russia’s business activity lowers in April
The anti-pandemic measures in place put business activity in the Russian economy under constraining pressure in April, according to the new issue of Economy: Facts, Assessment and Comments, an information and analytical commentary.
Output contraction was prevalent in a broad range of economic activities. The considerable dip occurred mainly on the back of shrinking outputs of investment goods. This was triggered by dropping demand, on the one hand, as uncertainty was growing over Russian and global economic outlook and many corporate investment plans were put under review, and, on the other hand, by suspended operations of a large number of enterprises in the non-work period. The outputs were further hit by, among other things, the shortage of spare parts, which also came as a result of suspended business operations of many manufacturers and supply chain disruptions.
The labour market came under increased strain as unemployment went up and part-time employment expanded. Consumer activity also dropped, with a slump in demand registered in both retail and consumer services.
As indirect indicators suggest, a drop in economic activity will continue into May. Muted domestic and external demand is set to retain its strong disinflationary potential in the next few quarters. At the same time, according to survey data, both households and businesses are showing less negative expectations. The easing of business curbs is poised to help in a recovery of incomes and strengthen positive trends in consumer sentiment in the coming months.