OREANDA-NEWS. October 22, 2009. Retail trade declined of 9.9% in September, according to Rosstat. However, cargo turnover and industry have shown substantial improvement since last month. Altogether, the Ministry for Economic Development estimated the 3Q09 GDP decline at 9.4% YoY, reported the press-centre of OTKRITIE FC.

View: The stabilization of the decline in consumption is a positive sign, indicating that the bottom may have been reached. This news, coming on the heels of continuing disinflation which supports real incomes. However, as producers' prices continue going up putting pressure on CPI we are unsure if comsumption will start improving from here. Industrial and cargo figures are quite good, but coming on the back of a restoration of production figures for a number of vehicle and machinery producers, they suggest no evidence for further improvements.

The 9.4% GDP drop in 3Q09 (10.9% drop in 2Q09) should not be treated positively as it is comes from a lower base, and underscores the tenuous nature of current improvements. To meet our -7.4% forecast for this year, GDP has to grow 7.3% QoQ, or be flat YoY.