Interfax: Probability Russia enters recession below 50% based on initial April data – Ulyukayev

Alexei Ulyukayev file photo

ST. PETERSBURG. May 23 (Interfax) – The initial economic data for April, including industrial output, indicates that the probability that Russia will enter a recession in the second quarter is below 50%, Economic Development Minister Alexei Ulyukayev told journalists on the sidelines of the St. Petersburg International Economic Forum.

In any case, he said, economic activity is expected to pick up in the third quarter.

The minister recalled that industrial production grew 2.4% year-on-year in April. “The trend toward a certain acceleration of growth that emerged in March is continuing,” Ulyukayev said.

“This is partly due to devaluation effects, partly to the reduction of saving ratios and increase in consumer demand. We’ll see how long it lasts. I don’t want to be a premature optimist,” Ulyukayev said.

Nonetheless, the initial April data “reduce the probability of a recession and there’s more than half a chance that there won’t be a technical recession,” Ulyukayev said.

“But these are more verbal things. Maybe there will be 0.1% growth in the second quarter, then there won’t be a technical recession, but neither is it anything particularly good,” Ulyukayev said.

In any case, he said, “starting in the third quarter, we believe, there will be an improvement in the situation.”

Commenting on the advisability of the Central Bank cutting its key interest rate, the minister again expressed the view that inflation will peak at 7.5% in May-June and then gradually drop to about 6% by the end of this year.

“In other words, I don’t see big risks concerning inflation, while the risks for economic growth are clearly big. And this is all the food for thought,” Ulyukayev said.

[featured image is file photo]

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