Russia’s GDP in June grew by 8.5% in annual terms, the Ministry of Economy reported. The indicator reached the level of the fourth quarter of 2019. In the second quarter of 2021, GDP growth was 10.1% compared to the same period in 2020 and 1.5% compared to the second quarter of 2019.
“In June, the GDP, according to estimates, reached the pre-pandemic level (+ 0.1% by the 4th quarter of 2019, seasonally adjusted),” says the ministry’s review “On the Current Situation in the Russian Economy” (.pdf). The Economy Ministry raised its estimate of annual GDP growth in May from 10.9% to 11.1%.
Domestic demand remains the driver of the economy. Net exports, according to the Ministry of Economy, make a negative contribution to GDP. “The main reason is a faster increase in the physical volumes of merchandise imports compared to exports,” the review says. Economic growth “continues to be supported by lending dynamics.” The Economy Ministry notes that the output of key non-resource sectors “confidently exceeds pre-pandemic levels.” The consumer market is seeing a slowdown in recovery.
Consumer demand is supported by the recovery of the labor market, the department said. The unemployment rate has been falling for the tenth consecutive month. Real wages also increased – in January-May 2021, it increased by 3% in annual terms and by 6.5% by five months of 2019. Real incomes of the population “continued to recover and approached the level of the same quarter of 2019.”
President Vladimir Putin has reported that Russia is targeting GDP growth of around 4%. The Ministry of Economy in the adjusted macro forecast until 2024 expects GDP growth by 3.8% in 2021. The ministry believes that the figure will not fall below 3% per year after the crisis.
About the forecast – in the material “Kommersant” “Let me proclaim growth.”