Government consumption also lost steam, as authorities pursued fiscal consolidation, while fixed investment growth fell to 1.5% in 2018 (2017: 6.5%).
Souring sentiment-especially following the unpopular May decree, which laid out a hike in the retirement age and VAT increase-likely weighed on spending, as did a weak ruble. Private consumption growth slid from 2017’s 3.2% to 2.2% last year. Meanwhile, import growth slowed dramatically from a 17.4% increase to a 3.8% expansion in 2018, eroded by the ruble’s stark depreciation in the year.ĭomestic dynamics were more downbeat. However, a fresh round of production cuts came into effect in January, which will hamper momentum going forward. Export growth rose to 6.3% in 2018 (2017: 5.5%), bolstered by a surge in hydrocarbon exports in the fourth quarter. The acceleration was driven by a better performance from the external sector, while domestic dynamics were more tepid. The reading comfortably overshot market expectations of a softer 1.9% increase and followed a sharp upward revision to construction figures in January, which has generated some uncertainty over the true state of play of the economy. According to a preliminary estimate by the Federal State Statistics Service (Rosstat), the Russian economy gained momentum last year growing 2.3%, well above 2017’s 1.6% expansion.
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