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Industrial Growth Takes a Holiday
Rosstat, the state statistics service, published data on industrial development in Russia for the first 11 months of the year on Friday. The end of the year doesn't look rosy for industrialists. Industrial growth slowed down to 1.5 percent in November, as opposed to 2.9 percent in October. Economists predict, however, based on investment flows in 2006, that industrial growth will pick up to 3-5 percent at the beginning of next year. The growth rate of industrial production in Russia is slowing. It was 4.1 percent for January through November of this year, as compared to 4.3 percent for the same period last year. Industrial production grew by 3 percent in November 2006 over November 2005, and 5.4 percent in September of this year as compared to September 2005.
The chief cause of the slowdown of industrial growth this November was a fall in manufacturing from 7.5 percent in October to 2.9 percent in November as compared to the same period of last year. It was manufacturing that pulled industrial growth up in the first half of the year, growing five to seven times faster than mining and creating approximately 2.4 times more added value. In October and November, however, mining experienced growth from 0.6 percent to 2.5 percent.
The decline in manufacturing reflects the lower competitiveness of Russian products as compared imports in the course of a year. Minister of Economic Development and Trade German Gref noted recently that the growth rate of imports is twice as high as that of consumer goods production. The difference between the production of investment goods (manufacturing equipment, vehicles and other equipment) and their import is more than twice a great.
These developments have not come as a surprise to economists. But no long-term decline is predicted. “Investments in fixed assets in 2006 grew faster than in 2005,” noted Renaissance Capital analyst Olga Cherdantseva. “That will give additional impulse to to industry at the beginning of 2007.”
www.kommersant.com
All the Article in Russian as of Dec. 18, 2006
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