OREANDA-NEWS. September 22, 2009. According to Minister of Economic Development Elvira Nabiullina, Russian GDP dropped 10.5% YoY in August, compared with -9.3% in July and -10.1% in June. The 8M09 GDP decline now stands at 10.2% YoY. Retail trade was down 9.8% YoY in August, after an 8.2% drop in July, reported the press-centre of OTKRITIE FC.

View: We believe that the accelerated decline in GDP represents rather bad news, underscoring the tenuous nature of recent economic improvements. Retail trade figures are especially worrisome as they indicate that the Russia could be falling into a consumption-driven recession, while the de-stocking process is no longer putting pressure on GDP. That being said, we believe that the planned increase in public sector salaries slated for September should provide timely support to help offset deteriorating consumption.