Russian economy is still under the threat of a recession
Moreover, according to Klepach, "there is a pause in the growth with a trend towards stagnation in industrial production sector, investment sector, and imports remain weak too" and "the turning point that we spoke of is expected in the second half of the year", added the Deputy Minister.
In our opinion, this statement of the Ministry of Economic Development and Trade may result from anticipating a seasonal peak of economic activity typical of summertime. Indeed, the drop that has been observed since Q3 2012 in output in core industries in the Russian economy may slow down in response to higher volumes in the construction industry (and, consequently, higher investment activity), as well as a good crop forecasted for this year by the Ministry of Agriculture of Russia.
However, we have repeatedly pointed to the fact that the foregoing positive effect on economic growth rates is short-term and insufficient to maintain high growth rates in the future. Thus, we believe that the threat of a deep recession has not gone away (as evidenced by adverse fiscal trends ), thereby calling for active measures aimed at reforming the Russian economy.
Kazakova M.V. - Ph.D. in Economics, Head of Economic Development Department