Russia industry output growth slows in record heat

* Slowest y/y output growth since November

* Manufacturing deteriorates vs June

* August expected to be worse

MOSCOW, Aug 16 (BestGrowthStock) – Russia’s industrial production
growth slowed to an eight-month low in July as manufacturers cut
output in the face of the worst heatwave on record, and analysts
braced for worse to come.

Output grew 5.9 percent year-on-year, the slowest since
November, data from the Federal Statistics Service showed.
Analysts polled by Reuters had expected growth to slow to 8.0
percent after a 9.7 percent rise in June. [ECILT/RU]

Manufacturing fared the worst, falling 0.4 percent
month-on-month as outputs of meat, bread, buckwheat and
agricultural machinery fell.

“We had expected a slowdown due to the heat and the
drought,” said Alexandra Evtifyeva, economist at VTB Capital.

“August will likely be even worse, and then we will probably
return (to normal)”.

The record heatwave has killed off around 40 percent of
Russia’s crops through drought, and has clouded Moscow in toxic
smoke from peat fires, causing consumers to flee the capital
this month.

Analysts estimate that Russia may lose up to 1.0 percentage
point of economic growth as a result. [ID:nLDE67902C]

Before the heatwave, the economy had been expected to grow
around 4 percent this year, after experiencing its worst
recession in 15 years in 2009.

Within the data, however, there were some bright spots —
production of cars, fridges and dishwashers grew strongly on the
year, reflecting an ongoing recovery in consumer demand.

Energy production rose 3.9 percent on the month, likely
pushed up by increased usage of air conditioning and fans to
combat the record high temperatures.

— For a TABLE on the data see [ID:nMSC000036]
(Writing by Toni Vorobyova; editing by Patrick Graham)

Russia industry output growth slows in record heat