US LNG exports surge but will buyers in China turn up?
Investing.com -- The growth of Russia’s Gross Domestic Product (GDP) has slowed from 4.5% year-over-year (y/y) in Q4 to 1.4% in Q1, falling short of the anticipated 1.8%. This slowdown is in line with a sharp decrease in output and indicates that the economy could be heading towards a harder-than-expected landing.
The downward revision of estimates follows the release of weaker-than-anticipated activity data in recent months, especially in the industrial production sector. Growth in this sector has slowed from 5.6% y/y in Q4 to 1.1%. Although Rosstat does not release a seasonally-adjusted figure, it is estimated that the y/y figure aligns with a contraction exceeding 1.0% quarter-over-quarter (q/q).
The steep drop in GDP growth was unexpected, despite predictions of an economic slowdown this year. High interest rates have resulted in a spike in private sector debt servicing costs and a noticeable reduction in credit growth, which is negatively impacting domestic demand. Capacity constraints are becoming more restrictive, hampering activity and limiting the economy’s boost from loose fiscal policy. A technical recession is a possibility in the first half of the year, and GDP growth for the entirety of 2025 could be significantly below the current forecast of 2.5%.
Inflation data released today reveals a slight decrease in the headline rate, from 10.3% y/y in March to 10.2% in April. This is slightly lower than the consensus of 10.3% and Capital Economics’ estimate of 10.4%.
According to Capital Economics, "inflation has now likely passed a peak and we think the central bank will start to lower interest rates from Q3 onwards."
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