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Economy in Brief

Improvement In The Russian Economy
by Louise Curley April 5,2010

Revised data confirm that the Russian economy declined 7.9% in 2009, however, the revised quarterly data show more deterioration in the first half of the year and more improvement in the last half of the year than the earlier data had shown.  Moreover, year to year percent changes in the output of the Five Basic Indicators that Russia publishes have continued to increase into the first two months of this year.  The Five Basic Indicators are a good predictor of Gross Domestic Product as can be seen in the first Chart, which shows the three month moving average of the  year to year changes in the Five Basic indicators compared with the year to year changes in Real GDP.

In addition to using a three month moving average to smooth the total of The Five Basic  Indicators, we have used a three month moving average on each of the components:  Agriculture, Retail Trade, Construction, Industry and Transportation.  Transportation has made the sharpest comeback, with output 7.9% and 9.3% above year ago figures in January and February of this year.  February Outputs in Agriculture and Industry were 4.5% and 4.1%, respectfully, above February, 2009. The volume of retail trade was slightly below the year ago figure in February, -0.7%.  Construction has improved, but in February was still 8.9% below February, 2009. These data are shown in the table below.

Along with the improvement in physical activity in Russia, there has been a significant decline in inflation as measured by the year to year change in the unseasonally adjusted  consumer price index as can be seen in the second chart.  The March figure of 6.42% is the lowest value since May of 1998 when the inflation rate was 5.63%

Five Basic Indicators (3 mo moving average of year to year % change) Feb 10  Jan 10  Dec 09 Nov 09 Oct 09 Sep 09 Aug 09 Jul 09
Total 1.6 1.4 -2.5 -4.9 -9.2 -10.9 -12.6 -14.3
Agriculture 4.5 4.1 5.3 5.5 0.9 -1.2 -4.0 -0.4
Construction -8.9 -10.0 -11.3 -15.3 -16.1 -17.2 -17.6 -19.8
Retail Trade -0.7 -3.2 -6.1 -8.2 -9.2 -9.2 -8.1 -6.8
Industry 4.1 4.0 -2.3 -6.4 -11.1 -11.0 -11.8 -13.3
Transportation 9.3 7.9 2.2 -1.8 -5.8 -6.9 -10.3 -14.2
  Q4 09 Q3 09  Q2 O9 Q1 O9 2009 2008 2007 2006
Real GDP (year to year % change) -3.8 -4.7 -10.8 -9.4 7.9 5.9 8.1 7.6
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