Russia’s GDP in Q I 2010 rose by 2.9%

The real volume of Russia’s GDP over Q I 2010 rose by 2.9% on the same period of 2009, thus amounting to 9,862 bn Rb.  

In accordance with the preliminary estimates of macroeconomic indices for 2010, in the "Scenario-based conditions for the functioning of the economy of the Russian Federation and the main parameters of the forecast of the socio-economic development of the Russian Federation for the year 2011 and the planning period of 2012 and 2013", GDP growth is expected to fall within the interval between 103.1 and 104.0%, with industrial production growth being between 101.9 and 102.7%, including that in processing industries – between 102.3 and 103.0%. In 2010, no significant growth of investment activity is expected. In view of the expected rate of GDP growth, the growth of investments is estimated to be in the interval of 102.4-102.9%. Annual inflation is expected to be at the level of 105.8-106.0%. In a situation of moderate growth of the population’s incomes (103.6%) and gradual revival of consumer crediting, retail turnover in 2010 is expected to rise by 4.4% on the previous year.

The scenario-based conditions and basic parameters of socio-economic development for the period 2011–2013 are plotted as two main variants with similar conservative estimates of external conditions but with different quality of economic growth.

It should be noted that in accordance with the adjusted data provided by the World Bank, the rate of growth of the Russian economy in 2010 can amount to 4.5%, which is by 0.5 p.p. below the previously published estimates. The experts do not entirely rule out the potential influence that can be exerted on the Russian national economy by the debt crisis and the slowdown of growth in the European economy through changes in oil prices, which will entail a drop of export revenues, some pressure on the Rb’s exchange rate, and a capital outflow. The World Bank’s experts believe that in the second half of the current year consumption and restoration of companies’ reserves will become the main source of economic growth. Consumption growth will largely be ensured by the government support measures that have been provided to the population since 2008.

The analysis of the main forecast parameters makes it possible to come to the conclusion as to the necessity to closely control the movement of the basic indices of the investment activity.

Experts from the World Bank recommend to actively attract non-government investments and to develop public-private partnership, as well as to rely on the support provided by international financial institutions. However, the experts express some doubts that companies will actually boost their investment activity in a situation of shrinking crediting and uncertainty in the world economy at large.

O.I. Izriadnova – Head of the Department of Economic Structural Issues