Russian industrial production unexpectedly expanded in March for the first time this year, growing at the fastest pace in eight months, led by gains in manufacturing and mining.
Output at factories, mines and utilities rose 2.6 percent from a year earlier after shrinking 2.1 percent in February and 0.8 percent in January, the Federal Statistics Service in Moscow said in an e-mailed statement today. The figure exceeded the highest projection in a Bloomberg survey of 19 economists, which had a median estimate of a 1 percent decline.
An upturn in industrial output bucks the trend of recent data showing the economy of the world’s biggest energy exporter expanding at the slowest pace since a recession in 2009. With the government heightening calls for monetary stimulus to revive domestic demand, Bank Rossii under outgoing Chairman Sergey Ignatiev this month took the biggest step toward easing monetary policy since raising all rates in September.
“The extractive sector has started to recover, which isn’t a bad signal in general and for our country in particular, considering the role it plays in our economy,” President Vladimir Putin told Prime Minister Dmitry Medvedev at a meeting broadcast on state television today.
The ruble has weakened about 2.2 percent against the dollar in the past month, its second month of decline and the worst performance among more than 20 emerging-market currencies tracked by Bloomberg in that period. The ruble lost 0.9 percent to 31.3490 per dollar at 4:30 p.m. in Moscow.
Manufacturing grew 3.4 percent in March from a year earlier and mining increased 0.6 percent, according to the report. Production of electricity, water and heat expanded 1.1 percent, the service said.
Still, industrial output was unchanged in the first quarter from a year earlier. The Economy Ministry last week cut its estimate for industrial-output growth this year to 2 percent from 3.6 percent and reduced its investment-expansion forecast to 4.6 percent from 6.5 percent.
“There is a lack of domestic demand due to a slowdown in lending, low rates of state investment and savings growth,” Maxim Oreshkin, chief economist for Russia at VTB Capital, said before the report.
High interest rates and a “very strong decline” in the estimate for natural gas exports are the main reasons for a lower growth forecast for this year, Economy Minister Andrei Belousov told reporters April 12.
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