Russia’s industrial output unexpectedly contracted in January for the first time in more than three years, bolstering the case for interest-rate cuts.
Output at factories, mines and utilities shrank 0.8 percent from a year earlier, the first decline since October 2009, compared with a 1.4 percent advance in December, the Federal Statistics Service in Moscow said today in an e-mailed statement. The result trailed all 19 estimates in a Bloomberg survey, which forecast a median increase of 1.4 percent.
The economy of the world’s largest energy exporter expanded last year at the slowest pace since 2009 as Europe’s debt crisis and a slowdown in China sapped demand for its commodities. Bank Rossii, the only major central bank to raise interest rates last year, refrained from increasing borrowing costs this week, defying calls by President Vladimir Putin to ease monetary policy to stoke expansion.
Putin has made economic growth a priority for his third term as president. Russia can’t return to its “pre-crisis growth model” and needs investment, he said Jan. 31. There’s room for Russia to boost industrial growth and domestic demand by easing monetary and fiscal policy, Deputy Economy Minister Andrei Klepach said last month.
Russian manufacturing shrank 0.3 percent from a year earlier in January, the weakest pace since at least 2011. Output at mines declined 1.2 percent, also the weakest in at least a year, while production at utilities rose 1.8 percent after a 4.7 percent increase in December.
Still, new orders for manufacturing grew in January at the fastest pace since March 2011, helped by an increase in domestic business, HSBC Holdings Plc said Feb. 1.