Russia recession

Although officials still continue to convince us, or ourselves that recession in Russia may not be, they do it somehow without enthusiasm. And this is a sure sign that there is a recession.

Of course, if you take a formal definition of recession (a decline in the economy for at least two quarters), then the time has not yet been suitable for its recognition. In fact, the crisis began to grow and delve into the real sector of the economy only from the second half of October 2008.

November is already a truly crisis month, as convincingly evidenced by Rosstat data on industrial dynamics: a decrease by 8.7% compared to November 2007. If you see the statistics on the production of the most important types of products, then some indicators simply demonstrate a landslide drop: iron ore mining - by 42%, apatite concentrate - by almost 60%, the production of mineral fertilizers - over 50%. A record fall was noted in the production of tractors (71%) and electric motors (73%).

December 2008 promises to be even worse. And this means that we enter the New Year with a fixed tendency to a sharp fall in the economy. And there are no illusions: this trend will not stop in a few months. All 2009 will be truly crisis. It is good if the fall in GDP will fit 4%, but another scenario is quite real - up to 15%. And then, to describe what is happening, the term “recession” will seem too political correct. A recession is just some decrease. And here is not some, but continuous!

I understand that someone will reproach me with unjustified abuse of passions. I myself categorically do not like what is happening to the economy. But responsible analysis requires realistic assessments. And where to draw at least some optimism, if the key factor that needs to be taken into account is the effectiveness of anti-crisis measures taken. They are so unsystematic and unpredictable that their final influence on the results of the next year may turn out to be multidirectional at best.

While one is clear so far: the economy will fall (either significantly or collapsively). And this seems to be much more realistic than to predict GDP growth by about 3%, to which government macro economists are now inclined. In this regard, it is appropriate to recall that more recently they assured us that the fall of stock indices is a problem of shareholders, brokers and exchanges. The real sector, they said, will pass the troubles. Not bypassed.

Moreover, they did not bypass so much that the most difficult 1992 is involuntarily recalled: the country's GDP then decreased by 14.8%. But it was a transformational crisis associated with the transition from a planned economy to a market. Then we fell until 1998, then we were restored, which was greatly contributed to the rampant growth of oil prices. The country's economy was completely restored in terms of GDP only in 2006. Fifteen years took us the transition to the market! The country, if you take the economy, just start to live ...

How will it be possible to justify the costs of the current crisis? Probably, the time for an exhaustive answer to this question has not yet arrived. I will express my point of view: a speculative model of the economy that we built in recent years is collapsing. It is clear that such a collapse could not be painless. That's why we have a crisis-in full: we’ll fall strongly, and hit it painfully ... someday, probably, we will rise again. It is a pity only of lost time and lost opportunities of the last eight years.