Bank of Russia analysts see slower economic growth in the third quarter

Russian economic growth slowed in the third quarter following a recovery in the second, according to analysts at the Bank of Russia's Research and Forecasting Department. Their assessment appeared in the October 14 Talking Trends bulletin.

The authors say July and August statistics indicate a moderate increase in economic activity after seasonal adjustment. Performance nevertheless differed substantially across industries.

They report growth in coal mining and investment related manufacturing alongside weaker consumer goods output and retail sales. Restaurants and paid services continued to expand, which they suggest may reflect a change in household spending patterns.

Temporary constraints on production capacity mainly affected intermediate industries, including oil refining. The authors assess that reduced fuel output also weighed on extraction, transport and wholesale trade.

Domestic demand slowed less than overall economic growth. The authors expect activity to accelerate as production capacity recovers.

Investment related industries continued to grow, supported in part by public procurement. The bulletin links additional construction and transport activity to infrastructure repairs and the diversion of exports onto longer routes.