(Moscow) Industrial production in Russia continued to decline in May, after falling into the red in April for the first time since the start of the conflict in Ukraine, according to figures released Wednesday by the Rosstat statistical agency.
Posted at 12:37 p.m.
Updated at 12:45 p.m.
In May, industrial production – an indicator giving the temperature of – fell by 1.7% over one year. Compared to April 2022, it fell by 1.9%, after a very dynamic start to the year.
Automobile production has been particularly hard hit, affected by the withdrawal of many foreign brands from the country and the halt in deliveries of foreign spare parts, forcing many local factories to shut down.
Car production fell in May by 96.7% over one year, and by 81.3% over one month.
The mining sector also toasted, with coal production down 4% year-on-year. Europe has notably decided on an embargo on Russian coal from August.
Oil and gas production fell by 3% over one year.
The United States imposed an embargo on Russian oil as early as March, despite being small importers. The European Union has promised to reduce its imports of Russian crude by 90% by the end of the year.
The production of vodka, on the other hand, increased by 3.8% in May and that of sweet wines by 39.3% over one year.
Consumption also down
Consumption in Russia continued to decline in May, falling by more than 10% year-on-year as the Russian population faced record inflation combined with a barrage of sanctions that foreshadowed lower incomes.
Retail sales, a measure of consumption, fell 10.1% in May year on year, but rose 0.5% month on month, according to data from the Rosstat statistics agency released on Wednesday.
Inflation, which skyrocketed in Russia in April to a 20-year high, began to decline in May, reaching 17.1% year-on-year.
The rise in prices has already considerably undermined the purchasing power of Russians, who have little savings, and caused their consumption to melt by 9.7% in April over one year.
At the end of May, President Vladimir Putin had assured him that inflation would not exceed 15% by the end of 2022, while announcing an increase in pensions and social minima.
Unemployment fell slightly, reaching 3.9% in May over one year against 4.0% a month earlier.
Russia has been hit with several rounds of Western sanctions after its military intervention in Ukraine launched on February 24, including embargoes on key exports that have increased inflation, already high since the COVID-19 pandemic.
The authorities want to be reassuring, promising that the sanctions will barely reach the economy, and predict that after a recession of around 8% this year, the country should return to growth as early as 2024.
Economists believe, however, that the worst is yet to come in the coming months, as the impact of the sanctions will become more visible and will be felt on the incomes of Russians.