Russian economy moderated in 2019

The level of Russia’s GDP last year increased by 1.3%, according to research by Rosstat, Forbes reports. Compared to 2018, economic growth has decreased by half, in that year it was 2.5%.

According to the Department, a significant slowdown occurred in the culture and sports industries. Rosstat representatives clarified that in 2018 Russia hosted the World Cup.

Rosstat analysts also compared the results of other sectors of the economy in 2019 and 2018. Consumption expenditures rose by 2.4% last year, while gross capital formation increased by 2.7%. The index of the goods and services exports volume fell by 11.1% due to unfavorable foreign policy.

The research data confirmed the forecast of the Ministry of Economic Development, according to which the growth was supposed to be 1.3%. In 2020, the Ministry of Economic Development predicts the economy to be boosted by 1.7%, in 2021 – by 3.1%.

Sofya Donets, an analyst at Renaissance Capital, said that the increase in household consumption from the second and third quarters to a level of 2.3% indicates the effectiveness of measures taken in order to accelerate economic growth. By next year, she predicts 3% growth, which could be achieved thanks to the growth of Russians’ income and slowdown in inflation. Stanislav Murashov disagrees with her. An economist at Raiffeisenbank argues that the payments promised by the president will provide little support, but they will contribute to an increase in revenues by 0.1-0.2%.