From the bottom to the day

According to the Ministry of Economic Development, the Russian economy has recovered almost half of last year’s decline

The Russian economy shows signs of growth in the spring. According to the Ministry of Economic Development, GDP grew in April of this year by 5.5% compared to April 2009. In January-April 2010, GDP growth was 3.5% compared to January-April 2009. With adjusted seasonality, according to the Ministry of Economic Development, GDP growth in April amounted to 0.7% compared to March. “Based on the results of four months of this year, positive trends in the Russian economy as a whole remain. In April, after a slight decline in February-March, economic growth resumed and amounted to 0.7% compared to March (excluding seasonality),” says the monthly monitoring of the Ministry of Economic Development.

The ministry does not hide its optimism about this. The economy has already recovered half of its decline, Oleg Zasov, director of the consolidated department of macroeconomic forecasting of the Ministry of Economic Development, told RIA Novosti. “There has been growth since the third quarter of last year, almost a year now, we can talk about a stable trend. Last year, GDP fell by 11.9%, almost half of which has already been recouped - this is very good. We are no longer at the bottom and are unlikely to return there,” he believes.

True, it should be recalled that GDP growth was 5.5% compared to last year’s avalanche-like decline. So, if we compare it with the pre-crisis period, then this will most likely not be growth, but, at best, marking time. Moreover, the contribution of industrial production to overall GDP growth is still extremely modest. However, there is a positive trend here too. “In April, all indicators improved greatly compared to March, including industrial production, primarily manufacturing industries, production of machinery and equipment. Investments and construction also contributed,” said Mr. Zasov.

After a fall at the beginning of this year (in February it was minus 0.6%, and in March 0.1%), industrial production began to grow. In April, this figure was 1.8%, and compared to the corresponding period in 2009 - by 10.4%. Growth in construction in April, excluding seasonality, amounted to 3.4% compared to March of this year, the increase in investment in fixed assets was 0.9%.

Inflation, according to Rosstat, has been 0.3% since the beginning of May, and 3.8% since the beginning of the year. It should be recalled that the official forecast of the Ministry of Economic Development for inflation is 6-7%. Last year, this figure was a record low of 8.8%, which, however, against the background of the global crisis and a sharp decline in consumption, could hardly be considered an achievement; at least in the leading economies of the world, inflation during the same period fluctuated around zero.

At the same time, many experts predict an acceleration in price growth in Russia in the second half of this year due to the recovery of consumer demand and the growth of the monetary base. And the monitoring of the Ministry of Economic Development contains data indicating a high probability of such a development of events. The average salary in January-April 2010 increased by 3.8%, and in April - by 12.4% compared to April 2009, which is explained by the gradual recovery of the economy from the crisis, the monitoring says. “The leaders in terms of wages continue to be financial activities and sectors of the fuel and energy complex. The average monthly wage in these industries exceeds the average monthly wage in the economy as a whole by two or more times,” the document says. However, the greatest growth is demonstrated by the industries that were hit hardest by the crisis, so it is partly of a compensatory nature. “Thus, nominal wages in real estate transactions in March 2010 increased by 19.2% compared to the corresponding period last year, in manufacturing - by 15.4%, in financial activities - by 14.1%,” -- noted in the monitoring.

Vera SITNINA