Business activity in may remained low

In may, business activity in the Russian economy remained at a reduced level, largely under the influence of restrictive measures to curb the epidemic of the coronavirus. However, in some sectors of the economy have improved the situation. This is stated in the next issue of information-analytical material “Economy: facts, ratings, comments”.

The reduction in industrial production continued, but at a slower pace than in April. The main contribution it made, the decline in mining, which is associated with the renewal of the agreement OPEC+ 1 may 2020. In the face of weak external demand reduced the production of intermediate goods, including petroleum products, a number of metals. At the same time, the production of investment and consumer goods increased significantly, which was associated with the easing of restrictions of economic activity in some regions of Russia. Most of the indicators of enterprises ‘ expectations remain in negative territory, but improved markedly compared to April, including trading enterprises.

There has been a recovery of consumer activity. Retail trade turnover increased in comparison with April, mainly due to the recovery of sales of non-food items. According to the operational indicators, the fall in consumer activity in June slowed down significantly yoy, which was associated with a gradual opening of shops, cafes and services.

Mitigation and complete removal of restrictions in many regions of Russia will accelerate growth of business activity in the coming months. However, the horizon 2020, both external and domestic demand will remain restrained. In 2020, according to Bank of Russia estimates, GDP will decrease by 4-6%, while the pace of economic activity will exert downward pressure on growth rates consumer prices.

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