Sleeping at the bottom

On August 25, the head of Sberbank German Gref announced that there are signs of stabilization in the Russian economy. And a day later, the Ministry of Economic Development of the Russian Federation reported: in July 2016, seasonally adjusted GDP decreased by 0.1% compared to June. What's happening?

Summer is coming to an end, and no significant changes in the state of the Russian economy are visible. Yes, the recession caused by extreme shocks - a sharp drop in the price of oil and the country's desire for autarky, isolation, withdrawing itself from the global economy and politics - has generally ended. But there is no growth. And it's not expected. The economy can still "sleep" for quite some time.

GDP for January-July 2016, according to the same Ministry of Economic Development, is 0.9% lower than last year (and this is after a decline of 3.7% in 2015). Minus one or plus one - it doesn't matter: all these near-zero fluctuations in real life are completely unnoticeable. Russia is not Europe: both companies and households, of course, feel the transition from 7% growth to 2% growth or 5% decline. And small fluctuations, especially near zero, are “beyond sensitivity”. They should only worry officials - they are more pleased to report to President Putin about a 1% growth than to admit a 1% decline. There are no more differences.

After the 1998 crisis, the reduction in domestic costs gave a powerful impetus to both exporters and producers competing with imports on the domestic market. No such effect is currently observed.

A twofold devaluation of the ruble should have made the domestic economy healthier and more competitive. Recall that after the 1998 crisis, the reduction in domestic costs gave a powerful impetus to both exporters and producers competing with imports on the domestic market. Now, no such effect is observed.

Significant growth is now observed only in the chemical industry and the agro-food sector. The latter is growing by 5-7%, and this is natural, because counter-sanctions have sharply reduced the volume of imports, and we have not eaten less. But experts complain that the price of this growth is a loss of quality. Competitors have been withdrawn from the market, so farmers and the food industry have become freer in increasing profits both by raising prices and by saving on costs that worsen the quality of goods. There are no imports - eat what they give.

Investment activity continues to decline. Uncertainty affects this - investors do not know how much oil will cost and what Russian economic policy will be like even in two or three years: what will be possible and what will no longer be possible.

Ten years - from 2008 to 2017 inclusive - may turn out to be lost for the Russian economy: most likely, the size of our GDP next year will exceed the level of 10 years ago by only 1%. This is a very bad campaign slogan for the 2018 campaign, and this is a completely natural result.

In the early 2000s, the goal of economic policy was to stimulate the growth of the entire economy. Then the government reduced taxes and simplified the regulatory system, that is, reduced fees from businesses. In the mid-2000s, the state stopped stimulating economic growth and began to care about the growth of itself - about state-owned companies, state corporations, and the size of the budget pie. State orders have risen sharply, and a whole segment of the economy has formed that serves the state and its businesses. These are the main beneficiaries of the last decade.