Stagnation in the Investment Sector Intensifies a Drop in Production

Within the first five months of 2013, the Russian economy was characterized by weakening of the dynamics of the domestic and external demand, as well as slowdown of growth rates of investments.

Source: Rosstat.
Fig. 1. Dynamics of base indicators of economic activities in the 2011-2013 period, as % of the respective period of the previous year

Due to stagnation in the investment sector of the economy, a drop in output of capital goods and engineering materials has intensified. In May 2013, the index of investments in capital assets amounted to 100.4% year on year against 113.7% a year before. The above factor had a negative impact on growth rates of industry.

Slowdown of growth rates of industry has been registered since May 2010 when the maximum values were achieved as compared to the respective period of the previous year. In 2013, a drop in the industrial production index has had a serious impact on the domestic market; in January-May 2013 it amounted to 100.2% as compared to the same period of 2012, while in May 2013, to 98.6% and 99.4% as compared to May 2012 and April 2013, respectively.


In industry, a drop in growth rates of manufacturing industries was registered. In May, the manufacturing index amounted to 95.6% year on year with a more dramatic drop in the engineering complex. As regards production of primary products it amounted to 102.3%; in production of power, gas and water it was equal to 101.2%.


A slowdown of growth rates of retail trade turnover to 102.9% year on year is justified by a decrease of 1.3% in households' real disposable income as compared to May 2012. The level of the inflation rate and households' real income had an impact on consumers' behavior. In May 2013, the consumer price index rose to 107.4% against 103.6% a year before. Real disposable cash income amounted to 98.7% on the May 2012 figure.


О.I. Izryadnova, Head of the Structural Policy Department