Inteligencia y Seguridad Frente Externo En Profundidad Economia y Finanzas Transparencia
  En Parrilla Medio Ambiente Sociedad High Tech Contacto
Frente Externo  
 
04/02/2006 | Russian GDP Grows at 6.4% in 2005, Outperforming Most Expectations

WMRC Staff

Total GDP is estimated to have grown at 6.4% last year, a substantial deceleration compared with the 7%-plus growth registered in 2003-2004, but well above the 5.8-5.9% range in official projections for the full year made at the end of the third quarter.

 

Global Insight Perspective

Significance

While growth has decelerated from the performance in 2003-2004, very strong surges in aggregate demand evident from activity indicators in the fourth quarter provided clues that full-year growth would surprise both official and unofficial forecasters of the Russian economy. The growth performance would have been stronger yet but for the sharp decline in net exports of goods and services in real terms in 2005.

Implications

Rising real incomes and robust enterprise earnings are buoying aggregate demand growth. There is, however, a strong import component of aggregate demand that weighs on overall rates of expansion of the domestic economy. On the sector of origin side, growth of industrial value added has slowed due to effective constraints on capacity and a real effective strengthening of the rouble.

Outlook

We can expect similar developments in 2006 and into the medium term. Thus, Global Insight is projecting further deceleration of Russian economic growth this year despite better than anticipated performance in 2005.

Russia's Federal Statistical Service (RosStat) published a flash estimate of developments in GDP in 2005 with breakdowns both by sector of origin and by end use. Total GDP is estimated to have grown at 6.4% last year, a substantial deceleration compared with the 7%-plus growth registered in 2003-2004, but well above the 5.8-5.9% range in official projections for the full year made at the end of the third quarter.

Looking at developments by sector of origin, two economic sectors turned in growth performances in 2005 that approximated or even bettered the 2004 figures. Value added in construction grew 9.7% last year, only modestly less than the 10.1% growth achieved in 2004. Value added in the trade sector grew at 12.3%, an improvement compared with 11.2% growth in 2004. Both of these sectors reflected the continued surge in Russian aggregate demand, which we return to below.

Growth of value added in agriculture and in industry in 2005 was disappointing. Value added in agriculture grew at only 1.1%, down from 5.5% in 2003 and 2.9% in 2004, years of relatively bountiful harvests. Industrial value added rose at only 3.5% in 2005 compared with 8.7% in 2003 and 6.0% in 2004. While growth was slower in all three of the sub-sectors of industry, the deceleration in extraction of natural resources was the most startling. After growth at 10.8% in 2003 and 7.2% in 2004, value added in natural resource extraction increased by a mere 1.8% in 2005. The natural resources branches have in many cases come up against effective constraints on productive capacity, thanks to insufficient flows of investment over a considerable period in the transition to a market economy. Even though investment has been growing rapidly in recent years, it has been growing from a very low base. In 2003, capital investment in the goods-producing sectors of the economy represented a mere 23% of the level in 1990. Moreover, as currently exploited deposits of natural resources have been gradually depleted, the new reserves that must be developed in order to replace that capacity have mainly been associated with increasingly difficult geologic and climatic conditions requiring more sophisticated technology and greater capital intensity. Manufacturing value added grew at 4.4% in 2005, down from 9.5% in 2003 and 6.6% in 2004. Manufacturers, particularly in the light industrial branches producing consumer goods, faced increasing competition from imports as the rouble appreciated by an estimated 10.5% further in the course of 2005. Slower growth in industry and agriculture was reflected as well in the transport and communications sector, where growth slowed to 6.1% from 10.5% in 2004.

Developments in GDP by Sector of Origin, 2005 (Year-on-year % change)
  2003 2004 2005
GDP 7.3 7.2 6.4
 - Agriculture 5.5 2.9 1.1
- Extraction of natural resources 10.8

7.2

1.8
- Manufacturing 9.5 6.6 4.4
- Production and distribution of electricity, gas, and water 1.6 0.9 2.2
 - Construction 13.0 10.1 9.7
- Transport and communications 7.2 10.5 6.1
- Wholesale and retail trade 13.2 11.2 12.3

On the end-use side, rising real disposable incomes continued to buoy household consumption, which grew at 11.1% in 2005, close to the 11.6% registered a year earlier. Government consumption slowed only modestly as well, to 1.8% compared with 2.1% a year earlier. Further improvement in the financial positions of enterprises encouraged robust capital spending, and after 12.8% growth in 2003 and 11.3% in 2005, gross fixed capital formation increased 10.5% in 2005. Growth in additions to inventories accelerated to 18.1% in 2005 from 13.7% a year earlier and thus the 11.4% growth registered in total gross accumulation at 11.4% closely rivalled the 11.6% achieved in 2004. In sharp contrast, net exports of goods and services declined by 15.0% in 2005 on top of a 10.3% decline registered in 2004.

Trends in Russian GDP by End-Use, 2005 (Year-on-year % change)

  2003 2004 2005
GDP 7.3 7.2 6.4
Final Consumption 6.2 8.9 8.6
-Households 7.5 11.6 11.1
-Government 2.2 2.1 1.8
-Non-Commercial 1.1 -3.0 0.1
Gross Accumulation* 13.2 11.6 11.4
-Gross Fixed Capital Formation 12.8 11.3 10.5
- Change in inventories 16.7 13.7 18.1
Net exports 3.0 -10.3 -15.0
- Exports 12.5 11.9 5.6
- Imports 17.7 22.5 16.2

*Including change in inventories
Source: RosStat

Outlook and Implications

The real drag on growth in 2005 was the sharp decline in net exports of goods and services in real terms for a second consecutive year. Exports, which are largely made up of fuels and metals, grew at only 5.6% in real terms in 2005 after 12.5% growth in 2003 and 11.9% in 2004. While exports grew strongly in nominal terms, by 30.3%, most of that growth in value was explained by high world market prices for the key export commodities. Growth in imports of goods and services in real terms held up far better in 2005 despite slower growth of economic activity in Russia, rising 16.2% compared with 17.7% in 2003 and 22.5% in 2004, encouraged by the stronger rouble. The drop in next exports in 2005 relative to a year earlier represented a decline in GDP of 1.4 percentage points.

We can expect similar developments in 2006 and into the medium term, i.e., continued slow growth in the extractive sectors, a brake on growth in manufacturing as the currency strengthens further from still very sizeable current account surpluses, and a continued drag of dwindling net exports on overall GDP. Thus, Global Insight is projecting further deceleration of Russian economic growth in 2006 despite better than anticipated performance last year. Our current forecast is for GDP growth to slide to 5.5% this year.

WMRC (Reino Unido)

 


Otras Notas Relacionadas... ( Records 1 to 10 of 1135 )
fecha titulo
16/06/2017 Russia, Putin, The Russian Mafia - Poison in the System (I)
15/08/2014 Geopolítica: El aislamiento ruso
10/08/2014 El gran desestabilizador
29/04/2014 Is Vladimir Putin a Rational Actor?
26/04/2014 Geopolítica: Los ejercicios militares y los juegos de guerra de Putin
04/02/2014 The Loneliness of Vladimir Putin
31/01/2014 Russia and the world - The triumph of Vladimir Putin
30/12/2013 Suicide bomber strikes Russia. Another 'black widow?'
26/12/2013 Putin Celebrates Birth Of KGB, USSR’s Hated Spy Service
22/12/2013 Rusia - El ocaso de los oligarcas


Otras Notas del Autor
fecha
Título
05/06/2006|
23/05/2006|
21/05/2006|
11/05/2006|
09/05/2006|
05/05/2006|
14/04/2006|
10/04/2006|
08/04/2006|
08/04/2006|
08/04/2006|
08/04/2006|
08/04/2006|
06/04/2006|
06/04/2006|
30/03/2006|
30/03/2006|
28/03/2006|
28/03/2006|
25/03/2006|
24/03/2006|
24/03/2006|
24/03/2006|
26/02/2006|
26/02/2006|
20/02/2006|
18/02/2006|
18/02/2006|
18/02/2006|
10/02/2006|
10/02/2006|
09/02/2006|
08/02/2006|
07/02/2006|
04/02/2006|
27/01/2006|
23/01/2006|
23/01/2006|
23/01/2006|
23/01/2006|
22/01/2006|
22/01/2006|
22/01/2006|
22/01/2006|
22/01/2006|
22/01/2006|
20/01/2006|
20/01/2006|
19/01/2006|
19/01/2006|
19/01/2006|
19/01/2006|
19/01/2006|
19/01/2006|
19/01/2006|
19/01/2006|
18/01/2006|
16/01/2006|
15/01/2006|
14/01/2006|
12/01/2006|
11/01/2006|
08/01/2006|
07/01/2006|
06/01/2006|
06/01/2006|
06/01/2006|
05/01/2006|
05/01/2006|
01/01/2006|
31/12/2005|
25/12/2005|
28/10/2005|
21/10/2005|
20/09/2005|
01/09/2005|
13/08/2005|
13/08/2005|
13/08/2005|
13/08/2005|
08/08/2005|
08/08/2005|
08/08/2005|
08/08/2005|
30/06/2005|
30/06/2005|
30/06/2005|
30/06/2005|
08/06/2005|
08/06/2005|
08/06/2005|
08/06/2005|
08/06/2005|
08/06/2005|
03/06/2005|
03/06/2005|
27/05/2005|
27/05/2005|
27/05/2005|
27/05/2005|
27/05/2005|
27/05/2005|
27/05/2005|
10/05/2005|
10/05/2005|
10/05/2005|
05/05/2005|
22/04/2005|
22/04/2005|
22/04/2005|
22/04/2005|
22/04/2005|
22/04/2005|
04/04/2005|
04/04/2005|
01/04/2005|
01/04/2005|
01/04/2005|
01/04/2005|
29/03/2005|
29/03/2005|
29/03/2005|
29/03/2005|
29/03/2005|
29/03/2005|
27/03/2005|
27/03/2005|
27/03/2005|
27/03/2005|
23/03/2005|
23/03/2005|
23/03/2005|
23/03/2005|
11/03/2005|
11/03/2005|
09/03/2005|
09/03/2005|
08/03/2005|
08/03/2005|
05/03/2005|
05/03/2005|
03/03/2005|
03/03/2005|
03/03/2005|
03/03/2005|
03/03/2005|
03/03/2005|
02/03/2005|
02/03/2005|
19/02/2005|
19/02/2005|
18/02/2005|
18/02/2005|
06/02/2005|
06/02/2005|
06/02/2005|
06/02/2005|
06/02/2005|
06/02/2005|
31/01/2005|
31/01/2005|
26/01/2005|
26/01/2005|
22/01/2005|
22/01/2005|
21/01/2005|
21/01/2005|
21/01/2005|
21/01/2005|
06/01/2005|
06/01/2005|
06/01/2005|
06/01/2005|
06/01/2005|
06/01/2005|
02/12/2004|
02/12/2004|

ver + notas
 
Center for the Study of the Presidency
Freedom House