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Agricultural sector accelerated the growth of the Russian economy

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Agricultural sector accelerated the growth of the Russian economy in 2019.

In the third quarter, the largest contribution to the dynamics of the economy was made by agriculture due to an increase in yield and agricultural sector accelerated the growth of the Russian economy.

Agricultural sector accelerated growth of Russian economy
In the third quarter, GDP added 1.7% with the help of the Agricultural sector.

According to preliminary estimates by Rosstat, GDP in the third quarter in annual terms increased by 1.7% after 0.9% in the second and 0.5% in the first quarter. However, the dynamics were lower than expected by the Ministry of Economic Development (1.9%). According to the results of nine months, the indicator increased by 1.1%. At the same time, according to the head of the statistical agency Pavel Malkov, the largest contribution to the growth of the economy was made by agriculture, industry and wholesale trade. In particular, agricultural production in the third quarter added 5.1%. The Ministry of Economic Development also noted that in the reporting quarter, the growth in the economy was facilitated by positive dynamics in agriculture due to higher yield indicators. In the fourth quarter, the agency expects the pace to remain at the level of the third quarter, which corresponds to the forecast of annual growth of 1.3% and the agricultural sector accelerated growth of the Russian economy.

The improvement in the economic dynamics of the third quarter is largely due precisely to the situation in the agricultural sector and to a good harvest, the head of the Center for Macroeconomic Analysis of Alfa Bank Natalia Orlova confirmed to Agroinvestor. “At the beginning of the year, I assumed that the economic growth of 2019 will be about 0.8% year-on-year, and this estimate very accurately reflected the situation in the first quarter of 2019. But preliminary results for the third quarter speak of accelerating growth and now a more realistic forecast for this year is 1.1%, ”she said.
According to analysts at the Moscow Credit Bank (IBC), the dynamics of WFP this year will be at the level of 0.8-1%. At the same time, the agricultural sector will retain its share of 3.7-3.9% in the structure of GDP, said Alexander Kaznacheev, deputy chairman of the bank. “The obvious acceleration of activity in most sectors, which is observed in the third quarter, could provide a good request for revising the forecast for GDP growth, which the Bank of Russia and the Ministry of Economic Development gave at the beginning of the year. However, among the limiting factors are the tendency to cool consumer demand within the country, as well as the unfavorable situation on world markets, which affects the dynamics of exports, ”he draws attention.

The Russian economy is showing positive dynamics this year, and in annual terms GDP growth is projected at just over 1%, estimates Oleg Zasov, director of the VEB Research and Expertise Institute. “This year’s good harvest – the second largest in modern Russia – is becoming a significant factor in economic growth,” he commented to Agroinvestor. “According to our estimates, GDP growth in the third quarter increased to 1.6% after 0.9% in the second quarter, and this acceleration of growth by almost 30% was provided by the contribution of the village.”
Russia’s GDP growth this year will reach 1.1%, and agriculture, taking into account updated estimates for grain and sunflower crops, will add 2.5%, said Daria Snitko, head of the Gazprombank Economic Forecasting Center. “The expected GDP dynamics this year, according to my estimates, will be about 0.9%, but do not forget that this year’s situation may repeat when Rosstat revised the data and the 2018 GDP growth jumped sharply to 2.3%,” – says Maxim Nikitochkin, senior manager of the EY agricultural services company group. According to him, agricultural production this year will increase by 2.6%, the agricultural sector accelerated the growth of the Russian economy.

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