Russia's Q3 economic growth likely improved slightly, may recover to 1.1 pct in 2017 as oil prices rise

Russian economic growth is expected to have improved slightly in the September quarter. According to a Barclays report, Russia’s GDP is expected to have contracted 0.3 percent year-on-year in the third quarter, as compared with the contraction of 0.5 percent in the second quarter. With the available data, it seems likely that investment and consumption continued to drop in sequential as well as in year-on-year terms.

This is expected to keep the real GDP growth approximately flat as compared with the second quarter growth. Many factors are hurting the recovery of Russia’s economic growth. Prices of oil continue to stay below the level seen in 2015, while the Russian ruble’s depreciation has lowered the real disposable income. Also, fiscal adjustment has cut disposable income further, while on-going sanctions have hurt investments.

“We expect growth to recover in 2017 to 1.1 percent and increase further in 2018 to 1.9 percent as oil prices increase”, added Barclays.