In spite of the fact that growth in the extractive industries was practically zero, its share in the GDP increased notably in the last year, even more than the rapidly growing construction industry. (The sign reads "Guaranteeing GDP growth?")
Photo: Valery Melnikov
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Oiling Up Construction
Rosstat estimates that the Russian GDP grew by 8.5 percent in the first quarter of the year. That is one of the highest indicators in recent years, topped only by the fourth quarter of last year (9.5%). The nominal volume of the GDP reached 8.838 trillion rubles (31% growth) and the GDP deflator was equal to 120.7 percent – that is the average change in prices of all goods and services in the economy. At first glance, construction is the moving force of economic growth. It attained 28.3-percent growth. Growth ranged from 9 to 12 percent for leading sectors, such as trade, hospitality, transportation and communications, real estate and finance.
Manufacturing is growing significantly more slowly. Added value in manufacturing rose by 7.6 percent. In production and distribution of electricity, natural gas and water the increase was 5.3 percent. At the low end of the totem pole were agriculture (3.2%), fishing (0%), education (0.2%) and healthcare (1.1%). The most symbolic show of lackluster, however, was the economically important sector of mineral production. It grew by a mere 1.5 percent. Thus, the economic growth pattern seen is only partially describable as Dutch disease. Growth was seen predominantly in non-trade sectors, but there was no growth in mineral production and the production of goods and services capable of competing with imports was not stagnant.
In spite of the fact that growth in the extractive industries was practically zero, its share in the GDP increased notably in the last year, even more than the rapidly growing construction industry. The paradox is easily explained. Prices for raw materials, and therefore the corresponding deflator, grew much quicker. As a result, even with the stagnation of oil production and other mining activities, the Russian economy has become even more dependent on extraction. The simplest model of the Russian is pumping oil into the construction in industry. The share of the GDP for the remaining industries, in spite of all the talk of innovation and changing models of economic growth, fell.
www.kommersant.com
All the Article in Russian as of June 17, 2008
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