On estimates of GDP dynamics in 2010

For the Russian economy this year will be better than expected: GDP growth was estimated at 3.3%, but it will be about 4%, according to A.L. Kudrin, the Vice-Premier, Minister of Finance.


Given that in the Ist quarter of 2009 the drop in output was the sharpest, namely the low base has inspired the upsurge in early 2010. According to the tentative estimates of the Ministry of Economic Development of Russia, GDP in the Ist quarter of 2010 has grown by 4.5%, and the industrial output – by 5.8%.

Analysis of the economy in the IV quarter of 2008 – Ist quarter of 2010 shows that the only factor for the recession overcoming is the growth of external demand. In the domestic market the most significant impact on the economic situation was still sustained decline in investment activity. It should be mentioned that the factors provoking the low level of investment activity was the continued decline in the scope of housing construction, as well as the focus on the less capital-intensive areas, in particular, more extensive utilization of production capacities. It is also worth noting that the savings in capital expenditures was accompanied by a slight increase in the demand for labor in comparison with the Ist quarter of 2009.

As a result of interchange of labor and capital factors, supported by the low dynamics of real wages growth, the economic situation was under the impact of inertial tendencies of 2009. In addition, in the background of the reduction in interest rates, the income growth in the economy from exports, the growth of liquidity in the banking sector, increased the volume of funds involved by credit organizations and the reduced capital outflow in absolute terms, investment activity in the Ist quarter of 2010 has reflected the absence of the refined business strategies for recovery from the crisis.

With regard to the potential of accumulated financial resources, positive trends in the external market and recovery of positive dynamics in domestic production, the Ministry of Economic Development of Russia is planning in May to upgrade estimates for 2010. According to the initial estimates of the Ministry of Economic Development of Russia, GDP for the year was assessed within the range of 3-3.5% with oil prices of $ 68-69 per barrel. Given the economic growth in January–March, the tentative GDP growth in the current year can reach 4%. 

The IMF also upgraded its estimates for the dynamics of the Russian GDP from 3.6% to 4%.

O.I. Izryadnova – Head of Laboratory for Structural Problems of the Economy