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MAYOR: the growth of Russia’s GDP slowed sharply in the first quarter

МЭР: рост ВВП РФ резко замедлился в первом квартале

In the first quarter of 2019, Russia’s economy added only 0.8%. This was announced by the Ministry of economic development in the April report, “the economy”.

The slowdown occurred against the backdrop of increasing tax burden due to the increase VAT, which annually withdraws from the economy is about 600 billion rubles.

The oil and gas production increased by 4.5%, metal ores — by 10.9%, export revenues exceeded budget for the first quarter of $120 billion, but it does not help the Russians, because the growth of real salaries slowed down 10 times, amounting to just 0.4%, while real incomes fell by 2.3%.

Because of falling incomes and rising prices in the MAYOR state the cooling of consumer demand. In General, the cost of food rose 5.1% for the quarter, so the population had to reduce purchases of non-food goods retail trade turnover slowed from 2.8% to 1.8%.

Investment demand also remains low: the purchase of imported equipment have fallen 5% for the quarter, total imports of investment goods fell by 6.2%, and the volume of construction works grew by only 0.2%.

Economists emphasize that in industry the main source of growth remains raw segment, while the manufacturing industry continues to slow.

Although the MAYOR expects a gradual acceleration of GDP and achieving a growth rate of 3% to 2024, the experts say about the current potential in the area of 0.7-1.3% per year, and by 2024, the rate is unlikely to be much more than 1.5%.

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