icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm

Russian economic activity picks up as coronavirus-related restrictions ease

Russian economic activity picks up as coronavirus-related restrictions ease
Russia’s manufacturing and services sectors bounced back in the second quarter, following a decline in April due to the Covid-19 pandemic and ensuing lockdown.

According to IHS Markit, the official manufacturing purchasing managers’ index (PMI) for the country’s manufacturing sector rose to 49.4 in June, up from 36.2 in May. A reading above 50 reflects growth in factory output, while a reading below signals contraction. In April, the PMI plunged to 31.1 amid the coronavirus shutdown and falling oil prices.

“The latest figure signaled only a fractional decline in manufacturing sector performance,” said the statistics agency, noting that it was the slowest decrease since May 2019. 

Output and new orders have also resumed growth in June, as lockdown measures were eased at the beginning of the month. However, an increase in client demand was only fractional due to the gradual resumption of operations, according to IHS Markit.

The services PMI, which dropped to an 18-year low of 12.2 in April as restaurants and other services closed, bounced back to 36.2 the following month.

Also on rt.com Russia’s cheapest crisis ever: country still accumulating cash despite Covid-19 & oil price shock

Business confidence is picking up amid hopes of greater client demand. Data showed that the collapse in demand caused an increase in unemployment in April and May, which slowed in June as the market stabilized. The number of citizens registered as unemployed has risen 3.5-fold since April 1, according to Russian Prime Minister Mikhail Mishustin.

“Despite growth in new orders, manufacturers continued to cut workforce numbers at the end of the second quarter amid signs of spare capacity and historically muted demand. Companies highlighted that redundancies and the non-replacement of employees were behind the solid fall,” IHS Markit said.

Consumer price inflation in the country slowed down to 0.3 percent month on month in May from 0.8 percent in April, while annual inflation totaled three percent, according to the latest data from the Russian Federal State Statistics Service. The Central Bank’s target rate for 2020 is four percent. Last month, the regulator slashed the key interest rate to an all-time low rate of 4.5 percent.

Price pressures softened as bottlenecks in supply chains were loosened and supplier stocks were rebuilt, the IHS Markit report said.

For more stories on economy & finance visit RT's business section

Dear readers and commenters,

We have implemented a new engine for our comment section. We hope the transition goes smoothly for all of you. Unfortunately, the comments made before the change have been lost due to a technical problem. We are working on restoring them, and hoping to see you fill up the comment section with new ones. You should still be able to log in to comment using your social-media profiles, but if you signed up under an RT profile before, you are invited to create a new profile with the new commenting system.

Sorry for the inconvenience, and looking forward to your future comments,

RT Team.

Podcasts