Russia's industrial output growth slows in March, OPEC deal weighs

MOSCOW: Russia's industrial output growth in March was half as strong as analysts' forecast, data showed on Monday, as Moscow's move to cut oil production in line with the global deal took its toll in the first quarter.

Industrial output grew 1.2 percent year-on-year in March after a 4.1 percent increase in February, data from the Federal Statistics Service showed.

Analysts polled by Reuters had on average expected industrial production to grow by 2.3 percent in March.

In the first three months of 2019, industrial output growth slowed to 2.1 percent in annual terms from 2.7 percent in the fourth quarter of 2018.

This was mostly driven by a slowdown in growth of raw materials extraction to 4.7 percent from 7.2, respectively, because of Russia's decision to cut crude production under the global oil output agreement, the economy ministry said.

OPEC, Russia and other producers, an alliance known as OPEC+, are reducing output by 1.2 million barrels per day from Jan. 1 for six months. They will next meet on June 25-26 to decide whether to extend the pact.

The slowdown in industrial output in March could also be partially explained by a so-called calendar factor: the number of days in March was higher than in February, the economy ministry said.

Russia's industrial output performance in March "seems to have normalised after the 'too good to be true' dynamics," said Dmitry Polevoy, chief economist at Russian Direct Investment Fund.