The last set of August indicators published by Rosstat today provides more support to our expectation that Russia’s GDP growth will pick up after an uninspiring 3.4% y/y in Q2. Earlier signs of this came from improving IP performance (6.2% y/y versus 5.2% in July). More support was provided by investment (slowing to 6.5% y/y from 7.9%, but still robust). A closer look shows the construction sector’s continued outperformance, with growth at 12.1% y/y.
The consumer sector accelerated as well in July, as retail sales increased 7.8% y/y versus 5.6% in July. This was supported by a drop in unemployment to 6.1% from 6.5% and steady wage growth (3.8% y/y, versus 3.9% in July). The August figures extend the trend that we noted in July. Even taking into account a base effect created by sever weather conditions in 2010, they show a positive momentum in the key sectors. We believe this will translate into a rebound in GDP growth in Q3, which we expect at 5.3% y/y.
BARCLAYS CAPITAL
EMERGING MARKETS RESEARCH