Rosstat reported an increase in industrial production in Russia in April by 5.2% y/y, in line with expectations

MOSCOW, May 31 (Reuters) – Industrial production in Russia increased by 5.2% year-on-year in April 2023 after rising 1.2% in March, Rosstat reported on Wednesday.

The data from the industry was in line with the expectations of economists, who forecast a 5.3% year-on-year increase in production last month.

Compared to March, industrial production fell by 5.0% in April, but excluding seasonal and calendar factors, according to Rosstat, this figure increased by 1.7% after an increase of 1.3% in March.

Within four months, the volume of industrial production increased by 0.6% compared to the period January-April 2022, when the increase was 3.1%.

In March 2023, the index returned to growth for the first time in a year thanks to last year’s low base, as well as rising military production and government spending keeping Russian industry afloat, easing the economic impact of Western sanctions.

The main driver of output growth in April was an increase in production in the manufacturing industries – an increase of 8.0% compared to April last year. after 6.3% a month earlier. According to Rosstat, by March 2023 this indicator had decreased by 4.5%.

Among the processing industries, the maximum increase in production compared to April 2022 was shown by industries related to the production of finished metal products (excluding machinery and equipment) – by 30.0%; electrical apparatus – by 29.3%; passenger cars, trailers and semi-trailers – by 27.3%; production of computers and peripheral devices, optical and electronic products – by 23.8%; production of coke and petroleum products – by 15.9%; other vehicles, including aviation equipment and shipbuilding – by 11.7%.

At the same time, the production of machinery and equipment decreased, including the construction of machine tools, the production of metallurgical and mining equipment and agricultural machinery – by 17.4%; volumes of wood processing and production of wood and cork products (excluding furniture) – by 9.7%; production of drugs and materials for medical purposes – by 9.0%; repair and assembly of machinery and equipment – by 5.0%.

Mineral production increased by 3.1% compared to April 2022 after a decrease of 3.6% a month earlier, but compared to March 2023 it decreased by 3.8%.

The energy sector showed a decrease in the index both compared to April 2022 and compared to March 2023 – by 1.4% and 14.6%, respectively.

Industries related to water supply and sewage, waste management and elimination of pollution decreased production volumes by 1.2% y/y, but increased them by 7.3% compared to March 2023.

The updated forecast of the Ministry of Development assumes a slight increase in industrial production in the Russian Federation in 2023 by 0.2%.

The Russian economy is in an “unstable equilibrium,” experts say, noting that the stimulus to growth that prevented a sharp collapse last year is wearing off, and new factors have an unclear outlook.

At the end of last year, industrial production in Russia fell by 0.6% yoy, after increasing by 6.3% in 2021. Before the start of the “special military operation” in Ukraine, the Russian authorities counted on an increase in industrial production by 3.3% in 2022. (Daria Korsunska)