The slowdown in economic activity in June was more noticeable in construction in Russia.
The economies of Russia’s regions began to slow down sharply in the summer of 2024. In particular, the index of regional economic activity (REA), calculated by the Higher School of Economics based on data on industrial production, construction and trade, fell in June from 75.4 to 65.3 points. This was reported by the Moscow Times.
The current value of the index is the lowest in recent years since March 2023, and its fall – by 10.1 points per month – is a record since the first months of the war launched by Russia against Ukraine. In particular, in April 2022, the REA lost 21 points).
The REA index experienced a fall only three times: during the pandemic (by 34.4 points), after the sanctions for the annexation of Crimea at the end of 2014 (by 18 points) and now after the invasion of Ukraine.
The REA composite index is still above 50 points, which means that in general the regional economy is growing, HSE experts note, but the number of entities that dominate growth (where activity is expanding in at least 4 of the 5 main sectors) fell in June from 52 to 34, and in every third region the economy began to contract.
The slowdown in economic activity in June was more noticeable in construction. Regions where large exporters are hit with sanctions are also suffering.
The problems of the regions are reflected in federal statistics: according to Rosstat, in June the growth rate of Russia’s GDP slowed to 3% year-on-year, although in May the economy grew by 4.5%, in the first quarter – by 5.4 %, and in February growth rates reached 7.6%.
The industry slowed to 1.9% growth, which was three times lower than a month earlier and in the winter (5.3% in May and 5.6% in the first quarter). Against the background of problems with payments, which hit the supply of imported goods in Russia, the growth of wholesale trade almost stopped: in June it added only 1.9% year-on-year, although in May it grew it 11.1%, and at the end of last year 16 -20% and higher.
Source: korrespondent
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