January 2014 statistics even worse than the worst expected

The Federal State Statistics Service (Rosstat) published on February 19, 2014 its data on the dynamics of the principal macroeconomic indicators in January 2014 year-over-year.


According to the available data, investment has dropped 7% year-over-year, retail sales turnover – 2.4%, real household income – 1.5% in Russia. Moreover, there is extremely low nominal wage growth and a small reduction in unemployment (by 0.2% against December 2013). The Rosstat previously confirmed a 0.2% decline in industrial output on an annualized basis.


It should be noted that the January results proved worse than even the worst values predicted by experts, causing a new round of concern about a new threat of recession in the Russian economy.


It stands to reason that a single month’s data is insufficient for making far-reaching conclusions about a stagnation or recession. However, one has to agree that such dynamics of Russian macro-indicators is another warning of an extremely serious situation in the Russian economic malaise: economic growth resources have been exhausted, there is no way to growth, high prices of energy resources keep can barely “push” GDP growth rate to a positive value.


Therefore, the issue of a new economic growth model has become critical for the Russia’s leaders amid forecast decline in global oil prices (see Fig. 1).


* IMF forecast.
Data source: IMF, World Economic Outlook database, October 2013.

Fig. 1. Global price of Brent crude oil in 2000–2018 ($ per barrel)


Kazakova M.V., Ph.D. in Economics, Head of Economic Development Department, Deputy Head of International Center for Budget Sustainability Study