The business activity in the service sector has been on the rise for two months in a row, with May growth rates being the highest in nearly 18 months, thanks to an upturn in demand and in the order volume, Reuters reports. That said, the rising business activity in the service sector has had no impact on the macroeconomic performance so far: according to the Ministry of Economic Development and Trade figures, during the month of April GDP had dropped by 4.2%.
The situation in the real sector of economy appears to be even tighter, with no signs of speedy recovery expected to be seen in the short-term
Nezavisimaya Gazeta reports that experts observe no conflict between the current increase in business activity and the drop in the key macroeconomic indicators. Daniil Namyotkin, expert of the Analytical Center, claims the upsurge in business activity is due to “the first signs of revival in demand having been underpinned by the rising optimism with regard to speedy recovery of the lending sector owing to the declining interest rates”. The expert nevertheless believes that the service sector index growth should not be overestimated or deemed as stable positive dynamic just now.
“And as for the sharp decline in GDP in April, this was rather due to the rising rates of the manufacturing activity decline, the slump in oil and gas export, in cargo turnover, and in the construction industry. The situation in the real sector of economy therefore remains quite tight, with no signs of speedy recovery to be expected in the short-term”, Mr. Namyotkin explained.