Rus­sia hit by slow­down


MOSCOW: Rus­sia’s econ­omy slowed more than fore­cast de­spite a rally in oil, its chief ex­port, end­ing three quar­ters of ac­cel­er­at­ing growth that fol­lowed the coun­try’s worst re­ces­sion this cen­tury.

Gross do­mes­tic prod­uct added an an­nual 1.8% in the third quar­ter, down from 2.5% in the pre­vi­ous three months, the Fed­eral Statis­tics Ser­vice said on Mon­day, cit­ing pre­lim­i­nary data, which don’t in­clude a break­down.

The re­sult missed a me­dian es­ti­mate of 2% in a Bloomberg sur­vey of 19 an­a­lysts.

Cap­i­tal Eco­nom­ics said the weak­erthan-ex­pected per­for­mance was prob­a­bly caused by slow growth in in­dus­trial pro­duc­tion, as well as one fewer work­ing day in this year’s third quar­ter than in the same pe­riod of 2016.

Ad­just­ing for the cal­en­dar dif­fer­ence, the ex­pan­sion reached 2.4% from a year ear­lier, ac­cord­ing to Goldman Sachs Group Inc.

De­spite a govern­ment vi­sion of an econ­omy re­made by the crash in en­ergy prices and a cur­rency cri­sis that fol­lowed, Rus­sia is in­creas­ingly re­sem­bling its old self as con­sumer de­mand comes to the fore.

Ex­pan­sion is fall­ing back to the limit of what the cen­tral bank be­lieves the econ­omy can ac­com­plish, with gains in GDP fore­cast to lose more mo­men­tum and slow slightly every quar­ter next year.

“The slow­down in GDP growth in the third quar­ter was driven en­tirely by weak­ness in the in­dus­trial sec­tor,” said Wil­liam Jack­son, an an­a­lyst at Lon­don­based Cap­i­tal Eco­nom­ics, which cut its full-year fore­cast to 1.8% from 2.3% af­ter the re­port.

“In con­trast, other monthly ac­tiv­ity fig­ures — cov­er­ing the re­tail, con­struc­tion and agri­cul­tural sec­tors — all strength­ened.”

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