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. Last Updated: 07/27/2016

GDP Rose an Annual 0.5% In Q4, VTB Capital Reports

The economy expanded last quarter for the first time since 2008, according to VTB Capital’s GDP Indicator, as manufacturing and service industries from banks to supermarkets recovered and the pace of job losses slowed.

Gross domestic product increased an annual 0.5 percent in the first three months after a 2.6 percent decline in the last quarter of 2009, according to the indicator. The economy grew 1.1 percent in March following a 0.5 percent expansion the previous month.

Output shrank for a fourth-consecutive quarter in October through December, by an annual 3.8 percent, after a 7.7 percent decline in the third quarter.

“The recovery in the manufacturing sector remains subdued, while activity in the services sector is rebounding strongly,” Alexandra Yevtifyeva, a senior economist at VTB Capital, said in the report. “Most encouragingly, the pace of job shedding slowed across both sectors in March.”

The Central Bank cut its main interest rates for the 12th time in less than a year last month as signs appeared that the recovery has lost momentum. Industrial production expanded at a slower pace in February, and bank loans continued to shrink even as lending conditions eased in the fourth quarter.  

Rail shipments, seen as a proxy for changes in industrial output, jumped an annual 12.7 percent in the first quarter, Russian Railways said April 2. Railroads account for about 85 percent of Russia’s total cargo transport, excluding pipelines.

In February, the last month for which official statistics are available, retail sales rose an annual 1.3 percent, while the unemployment rate fell to 8.6 percent from 9.2 percent.

VTB Capital calculates its indicator by using output measures from its Purchasing Managers’ Indexes, which are surveys of business conditions in manufacturing and services industries.