Moscow classifies data on the state of the economy to calm down public after civilian industries suffer widespread contractions, Russian banks and analysts say

cross-posted from: https://lemmy.sdf.org/post/37781918

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***Russia has decided to classify data on the state of the economy and foreign trade as a state secret. From now on, only individual indicators that are favorable to the authorities will be disclosed in order to calm the public, UNIAN reported.***

According to data from the Foreign Intelligence Service of Ukraine, **serious crisis processes are observed in the coal mining, oil refining, construction, automotive and logistics industries** of the Russian Federation, which in general provide about 17% of revenues to the federal budget.

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The EU extended sanctions against Russia for another six months.

Due to Moscow's continued actions destabilizing the situation in Ukraine.

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The report comes as defense drives Russia’s industrial growth while civilian production contracts.

Russia’s industrial sector, fueled by the defense sector, grew by 1.6% in May and 1.8% over the last year after accounting for seasonal factors, state statistics service Rosstat has reported.

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Civilian industries have reported widespread contractions, leading analysts to warn that **Russia’s economy has become disproportionately driven by the military-industrial complex** in the fourth year of its invasion of Ukraine.

Tverdye Tsifr (“Hard Numbers”), a Telegram channel that reports on financial data, noted a 42% surge in the output of “miscellaneous transport equipment” and a 14% increase in finished metal products over the last month, compensating for weaker performance in March and April.

Clothing production increased by 12%, and production of electronic and optical products, computers and pharmaceuticals rose by 9%.

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Analysts from Russia’s largest private bank Alfa-Bank described the May results as evidence of a highly segmented economy.

Previously, “when civilian growth was weak and defense growth was robust, all sectors expanded to some degree,” wrote MMI, a Telegram channel that analyzes Russian and global microstatistics, of the new divergence between military and civilian industry.

“Now, **all civilian industries have recorded declines**, while defense output has accelerated. There are not enough resources to go around for everyone, so someone has to cut back,” it said.

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Rosstat reported that the producer price index for industrial goods shrank by 1.3% in May and by 2.8% since the start of the year.

A sustained decline in industrial prices, Promsvyazbank warned, “signals the real economy’s diminished resilience to high interest rates.”

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According to the government-affiliated CMACP analytical center, industrial growth has been mostly concentrated in the defense sector, with civilian industries remaining stagnant since mid-2023.

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