The initials of the Russian prime minister are identical to the Russian abbreviation for gross domestic product.
Photo: Alexander Miridonov
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GDP Growth Slows in November
The advance GDP indicator published yesterday by VTB Europe Bank shows a sharp drop in the economic growth rate in Russia in the fourth quarter of the year. The bank calculates its GDP indicator from the purchasing managers’ index using industry and the service sector. It corresponds to expectations of the growth rate of the GDP on the part of Russian big business. In November, the GDP indicator dropped to 2.1 percent, from 5 percent the previous month.
According to a press release from the bank, the GDP indicator is the lowest it has been since April 1999, when it was zero. The VTB Europe GDP indicator differs insignificantly from the official GDP estimate. By the calculations of the Ministry of Economic Development, the GDP rose 5.9 percent in October, compared to 9.3 percent in October 2007.
The bank’s research showed a sharp fall in production volume in both industry and services. The index of general business activity fell to 36.5 points in November from 48 points in October. That is the lowest point since that indicator began to be published in January 1998. The fall is the result of a sharp reduction in new orders in both industry and services, the bank’s economists note. Many official estimates of GDP growth for 2009 range between 3 and 3.5 percent, if the price of oil falls below $50 per barrel. Economists note, however, that the level of uncertainty in the indicator is growing, as is the likelihood of a shrinking GDP and stagnation. The GDP indicator published yesterday is evidence of the increasing likelihood that the GDP will fall.
www.kommersant.com
All the Article in Russian as of Dec. 05, 2008
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