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The Skinny on Q1 GDP Growth in 2025: Rosstat Spills the Beans
The cat's outta the bag, y'all! Rosstat's first official assessment for Q1 GDP growth in 2025 is here, and it's not exactly rosy. According to their data, we've hit a local peak back in Q4 2024 and are now coasting into a slowdown, with seasonality taking its course (check out the chart!). But, as Rosstat cautions, new data could sway the dynamics. The Ministry of Economics and other observers agree, noting that for January-May 2025, things have more or less stabilized at the level achieved by the end of 2024 (according to "Kommersant" of June 18).
Let's break down the Q1 GDP production: the production of added value in other transport equipment and machinery grew like wildfire (35.8%), followed closely by finished metal products (18.2%), computers, electronics, and optics (12.7%), and repair and maintenance of machinery and equipment (10.2%). But, don't think these growth numbers mean we're out of the woods, though. Mining took a nosedive (-4%), as did electricity (-3.8%) and other services (-2.5%).
As for GDP consumption estimates for Q1, we're still waiting. However, based on the Center for Macroeconomic Analysis and Short-Term Forecasting's (CMASF's) calculations, retail has played a big role in consumer demand dynamics. Essentially, household spending was a major player in driving economic growth. CMASF claims a "stagnation economy" might've formed, with a noticeable shift in wages by total profit for investment resources. They're also saying the old model using wage, income, and consumption growth of the population, housing construction, and import substitution no longer works.
Now, according to the Ministry of Economic Development, the total turnover of retail, catering, and paid services to the population saw a 2.3% year-on-year increase in April compared to a 2% increase in March. For the first four months of 2025, consumption grew by 2.7%. SberIndex data suggests real weekly consumer spending growth kept chugging along, even hitting the first week of June at a 1% rate. Despite some grumblings, the consumer confidence index by Rosstat rose to -8% in Q2 2025 from -11% and -9% in Q4 2024.
Artem Chugunov
Quick Takeaways from the CMASF Forecast (Q2 2025)
- Energy Sector Stability: Sustained oil and gas exports remain key to economic growth, even amid market fluctuations.
- Export Diversification: Developing new energy export routes and markets keeps revenue streams steady, especially as partnerships grow beyond traditional European markets and into Asia.
- Import Substitution and Domestic Production: Policies promoting import substitution help domestic manufacturing and agricultural sectors thrive.
- Infrastructure Development: Investments in transportation, logistics, and digital networks boost productivity.
- Agricultural Sector Expansion: Favorable weather conditions and technological advancements foster robust agricultural output, making Russia a major food exporter.
- Stable Domestic Demand: Improvements in household incomes and increased consumer confidence support retail and service sector growth.
- Financial Sector Resilience: The banking sector's stability encourages investment and business expansion.
- Technological Innovation and Digital Economy: The growth of IT services, software development, and digital platforms offers fresh economic opportunities.
In A Nutshell
CMASF's report highlights that Russia's economic growth in Q2 2025 stems from a mix of traditional strengths in energy exports, agriculture, strategic import substitution, infrastructure investments, stable domestic consumption, and emerging digital innovation. These factors work together to create a resilient, diversifying economy even in the face of ongoing external pressures. If you desire more detailed insights or data from the latest CMASF forecasts, I can hook you up!
The financial sector's stability, as per the CMASF report, plays a crucial role in encouraging investment and business expansion in Russia's economy. The growth of IT services, software development, and digital platforms in the digital economy also offers fresh opportunities for Russia's economic growth.
