Country getting closer to pulling out of its recession

pulse

February 1, 2017 8:57 PM

A preliminary estimate showed that Russia's GDP dipped by 0.2% in 2016, according to the Federal Statistics Service.

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Russia is getting closer to pulling out of its recession.

This was above expectations of a contraction of 0.5%, according to the Bloomberg consensus.

The estimate "is consistent with the idea that the economy returned to positive growth in the final quarter of last year," William Jackson, senior emerging markets economist at Capital Economics, wrote to clients.

Taking a look under the hood, data suggests that two industries in particular pushed the economy forward: Manufacturing rose by 1.4% in 2016 and the production of natural resources was up by 0.2%.

However, on the flip side, dropped by 3.6%.

Additionally, the Federal Statistics Services also revised 2015 GDP to a 2.8% drop, compared to the prior estimate of a 3.7% contraction.

This revision "appears to be due to the inventory cycle exerting a smaller drag on growth," suggested Jackson.

"According to today's GDP figures, gross capital formation fell by much less than previously thought (-13.0% versus -20.9%), whereas fixed investment actually fell more."

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