Russia’s output—a bumpy recovery According to Rosstat estimates, real GDP increased by only 2.9 percent in the first quarter of 2010 compared with the year before, much less than most market observers expected (table 1.1). The growth momentum of the second half of 2009, which was supported by the fiscal stimulus, faded away in the first quarter of 2010. The reported growth (2.9 percent) implies that the real GDP level has even contracted in the first quarter of 2010 compared with the last quarter of 2009 on a seasonally adjusted basis. In a much more constrained international environment, such a bumpy recovery differs markedly from the relatively smooth recovery path observed after the 1998 crisis (see figure 1.3). But even taking into account special factors such as very cold winter months, weak demand conditions were a constraining factor on the economy. This also implies that the observed growth on a year-to-year basis was mostly the result of a very low base in 2009. The sectoral composition of growth also shows a mixed picture. The tradable sector and manufacturing, in particular, performed well in the first quarter of 2010, growing by 10.9 and 11.8 percent, respectively (table 1.2). Among non-tradables, by contrast, transport and communications rebounded strongly in support of industrial recovery, but retail and wholesale trade remained stagnant and construction fell by 9 percent. Figure 1.3. Real GDP Level (Index, seasonally adjusted): 1998 vs 2008–2009 crises
Source: World Bank staff calculations based on Rosstat data.
The most recent output statistics for April 2010, however, display much more positive dynamics, with manufacturing taking the lead and non-tradables gaining momentum. According to Rosstat, industrial output increased by 10.4 percent in April 2010 (year on year), with manufacturing industries reporting growth of 15.7 percent (table 1.1). All main manufacturing industries registered healthy growth rates in April, with producers of transportation devices reporting the highest growth (26.4 percent), followed by electro-technical equipment (25.8 percent), and metallurgy (24.2 percent). Growing external demand for metals and chemical products, and the government-sponsored program for the purchase of used cars boosted demand in the car industry in April. With rising real wages and incomes, non-tradables also grew much faster in April 2010. Retail trade grew by 4.2 percent, while the transport increased by 14.8 percent. Even the construction sector, depressed for almost two years, showed signs of recovery in April 2010; the construction of residential housing increased by 16.2 percent (year on year). I. Recent Economic Developments | 5