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Industry Forecasted to Have a Break
The World Bank report on Russia’s economy in November of 2007 was presented in Moscow yesterday. The growth in processing industries is forecasted to slow down on the ruble appreciation (estimated at 12.9 percent for this year) and poor labor efficiency.
The rates of economic and industrial growth are still very high in Russia, the World Bank economists specified quite in line with the country’s statistics. According to data released by Federal Statistics Service yesterday, the industry stepped up 6.5 percent on year in January through October of 2007. The growth was 0.4 percent above the one posted a year earlier.
But the acceleration in processing industries isn’t as rapid as it used to be, the World Bank analysts pointed out. The indicator stood at 5.5 percent and 4 percent in September and October respectively (vs. 6.2 percent and 5.1 percent a year earlier). Some slowdown is undisputable if taken for longer periods, while the growth in processing industries is far from stable.
The share of processing investments narrows as well. If in the first half of 2006, the money injected in processing industries accounted for 18.7 percent of all fixed capital investments and for 19 percent of direct foreign investments, the figures were 17.5 percent and 11.1 percent respectively if taken for the first six months of this year. The investments in production of crude oil and raw materials soared at the same time.
The appreciation of ruble and poor labor efficiency are the basic reasons of some slowdown in processing industries, according to the World Bank analysts. Their recommendation to contain inflation is to improve labor efficiency and competition, which aren’t sufficient today.
www.kommersant.com
All the Article in Russian as of Nov. 20, 2007
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