Economic performance remains sluggish in September

RUSSIA ECONOMICS - In Brief 29 Oct 2026 by Evgeny Gavrilenkov

---

Rosstat reported that output in the five basic sectors - industry, agriculture, construction, transportation, and trade - was up 0.2% y-o-y in 9M26 and 0.7% in September alone. Both figures are unimpressive, though some parts of the economy performed slightly better last month. Industrial output grew 1.1% m-o-m in seasonally adjusted terms, and in September alone rose 1.8% y-o-y, pushing its 9M26 growth to 0.2%. Mining declined 4.1% y-o-y in September and 1.3% in 9M26, while manufacturing jumped 5.6% y-o-y in September - the fastest monthly growth this year - and grew by 1.0% in 9M26. It seems a specific government demand surge, which began in 2022 and has grown rapidly each year, received an extra boost from upwardly revised government spending. This impact will likely remain strong in 4Q26; however, even if so, overall industrial growth should not exceed 1% this year as cooling consumer demand and an overly strong ruble suppress production of consumer goods. Retail sales growth is slowing, rising 3.9% y-o-y in September and 5.0% in 9M26. Paid services consumption is also cooling, growing just 1.8% in 3Q26 compared to 2.7% in 1Q26. Passenger transportation fell 1.7% y-o-y in 9M26 and 4.6% in September, while freight transportation managed a modest 0.4% y-o-y increase in 9M26 but also slowed. Residential construction dropped 13.4% y-o-y in 9M26, though it was down only 3.5% in 3Q26. Overall construction decreased 2.1% in 9M26 but grew 2.6% in September alone. Agriculture declined 2.6% y-o-y in 9M26. Overall, while economic growth this year may be slightly above zero, the expected rate could be within the margin of statistical error. Expectations for next year remain un...