What explains the unexpected acceleration of the Russian economy :: Economics :: RBC

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The growth rate of the Russian economy has set a record of six years, reaching 2.3% and significantly exceeding the forecasts of experts and the Ministry of Economic Development. The key role in this was played by a large-scale revision of Rosstat's construction data

Photo: Donat Sorokin / TASS

An increase of 2.3% is a lot or a little.

GDP in 2018 increased by 2.3% compared to 2017, according to Rosstat, published on 4 February. The Russian economy has not shown similar growth rates since 2012, when GDP increased by 3.7%. Subsequently, it began to slow down and recede in 2015, which emerged a year later: in 2016 and 2017, growth rates were respectively 0.3 and 1.6% (although Rosstat has already reported a decline in 2016).

2% – a symbolic figure for the economic blockade of the government. At the height of the recession in 2015, Alexei Ulyukayev, who held the position of Minister of Economic Development, said that, after a recession, GDP will return to growth, which in 2016 will reach 2%.

The 2% discussion has again become relevant in 2017. Maxim Oreshkin, who replaced Ulyukaev as head of the Ministry of Economic Development, abruptly increased the forecast for economic growth – shortly before his arrival, he supported the government's economic blockade, this the figure would be 0.2 or 0.6%, and under Oreshkin the Ministry of Economic Development gave a forecast of 2%. It was not possible to reach this level in 2017, but in 2018 everything was the opposite: formally, the ministry did not count for two percent growth, but the economy went to this.

However, in any case, 2% is not enough, since Vladimir Putin, in a May decree, ordered the government to guarantee rates of economic growth above the world average (3.5-4%). Oreshkin explained that Russia's lag in GDP is largely due to the demographic situation. To solve the demographic problems, the government has continued to raise the retirement age.

It's all based on construction

Almost no one expected economic growth of more than 2% last year: the consensus forecast of the Higher School of Economics foresaw a growth of 1.7%, according to the Ministry of Economic Development of 1.8% %. Expectations changed at the end of January, when Rosstat drastically revised the construction dynamics in 2018: as it turned out, in 11 months it grew by 5.7% (compared to the same period last year) instead of 0.5% previously published; of all year – 5.2%, which was a record for 10 years.

Subsequently, the Ministry of Economic Development estimated GDP growth in 2018 at 2%. He explained the review of the data from the situation in the autonomous district of Yamalo-Nenets, where last year NOVATEK launched the third phase of the Yamal LNG plant. Construction volumes in the YNAO were not taken into account in the course of the year – the gap between them and the investments was significant, although these two indicators usually correlate: the construction volume for nine months amounts to only 97 billion rubles and investment – 592 billion rubles, stressed the ministry. "Probably, during the review of the data, the indicated discrepancy, which represents about 6% of the total amount of work in" construction "activities in the Russian Federation as a whole for 2018, has been eliminated," explained the department.

The explanation attracted criticism from economists. According to the Rosstat method, the expensive equipment installed at Yamal LNG is taken into account in the investment statistics, but not in the construction sector, wrote the director of the analysis department of Loko-Invest Kirill Tremasov, the last head of the macroeconomic forecast department of the Ministry of Economic Development. Furthermore, the Rosstat recorded a sharp increase in the construction of the YNAO even before the review, he noted.

Without a revision of the construction data, GDP growth in 2018 (judging by the information for three quarters) could be 1.8%, said the Macroscopic analyst at the Raiffeisen Bank Stanislav Murashov. The review provided 0.4 ppt. growth is more than a contribution to the acceleration of the public, mining and commercial sectors, combined in the fourth quarter. Other industries, on average, almost did not grow. "Therefore, the hypothesis of a significant increase in GDP due to construction (obtained only by reviewing data on it) was confirmed.This is not a large-scale growth in the whole economy," observes Murashov .

"In these numbers [Росстата] you can believe both construction data and GDP growth. But then we must honestly admit that the statistics collection system is completely ruined. There are huge losses. [данных]this translates into gigantic calculations. We lost 565 billion rubles in construction for three quarters. In the same YNAO lost 70% of construction work, "said RBC Tremasov.

"We have to admit that the system for collecting statistical information has collapsed, or allow mass registration, I have no objective data, I do not exclude either the version or another version," he added.

Chinese wall in Russian statistics

Rosstat, formerly directly subordinated to the government, after Maxim Oreshkin's arrival at the Ministry of Economic Development, returned to the jurisdiction of this ministry (it was already there in 2008-2012). At the end of 2018, Oreshkin replaced the head of Rosstat – instead of Alexander Surinov, who held this position for almost 10 years, Pavel Malkov, head of the public administration department, ran the service, with no experience in the statistics department. Malkov announced plans to reform it.

Oreshkin during the discussion on the construction data review said that the Ministry of Economic Development does not affect Rosstat's estimates. "In the modern world of informative opening, if at least once someone had given the command to change something, it would be immediately known to everyone, Rosstat and I have a high Chinese wall, so we also periodically ask for the numbers and try to find an explanation for them, "he wrote on his Facebook.

The Ministry of Economic Development did not respond to a request by the RBC on the causes of GDP growth in 2018 above its forecasts.

What other reasons for GDP growth

  • In general, following the results of the year, the most important role in the acceleration of the economy was played by the mining sector. The sector that provides the largest contribution to GDP (see chart) for the year increased by 3.8% (2.4% a year earlier). In 2018, oil production in Russia reached its peak post-Soviet, and the new OPEC + agreement to limit production came into force only on 1 January.

  • The financial and insurance business showed a rapid growth (+ 6.3%). "Finance has grown before, basically the added value of services for issuing loans to the public, partly explaining where consumer demand goes – not retail, not consumer, but paying for loans ", says Tremasov.
  • Significant growth in the last quarter of the year has shown the sector of public administration and military security, as well as social security: for the first nine months it has grown by 1.8%, and by # 39; – 3.5%.
  • The acceleration factor was the growth in net exports (exports minus imports), says Dmitry Dolgin, chief economist of ING for Russia and the CIS. On the one hand, it is the oil and gas sector, on the other hand, the decline in imports associated with the devaluation. According to Rosstat, exports grew by 6.3% last year (in 2017 – by 5%), imports – by 3.8% (17.4% a year earlier). Net exports accounted for 10% of GDP in 2018, compared to only 5.4% in the previous year.
  • Against the backdrop of the World Cup, hotels and catering businesses grew 6.1% compared to 3.1% in 2017. However, its contribution to GDP is low, notes Dolgin (around 1%, according to Rosstat).
  • Production increased only by 1.5%. In the last two months of last year, they showed zero growth.
  • Wholesale and retail trade increased by 2.2%. "This is too much" gas is "in the wholesale trade, but we have not yet had such acceleration in gas production. [в четвертом квартале]"Says Tremasov: In the nine months of 2018, the growth rate was only 1.4%." Most likely, the previous nine months have been recalculated, "says Tremasov.
  • Household consumer spending for the year increased by 2.2% – less than in the first three quarters, says Natalia Orlova, chief economist at Alfa Bank. According to her, this is surprising, because GDP growth has significantly exceeded expectations. "Household consumption is slowing down and inventories have improved – this is a rather unintuitive combination, which is probably stock of non-consumer goods, but specialized goods, but it's hard to guess here," he notes.


Will the economy grow further?

Formally, growth of more than 2% means overheating of the economy. The potential GDP growth rates (the maximum level of production with full use of all inputs and the normal use of capacity), according to the Central Bank, are 1.5-2%, according to the independent analysts, even lower. On this basis, GDP growth shown could be an argument for the central bank to increase the key rate.

However, the current GDP growth is not an argument in favor of strengthening regulator policy, Dolgin said. "Investment growth is weak, domestic consumer demand is slowing down, all growth is export-oriented, which is not an indicator that the economy is constantly growing or accelerating," he says. .

Neither the Ministry of Economic Development nor analysts expect the economy to accelerate in 2019. The main factor is the growth of VAT from 18 to 20%, which will slow down consumer demand. The Ministry of Economic Development foresees a GDP growth of only 1.3% and the economy will begin to accelerate in 2020 (+ 2%). According to the Ministry of Economic Development, it will be able to achieve a growth of 3% in 2020, when the authorities will actively implement the backbone infrastructure development plan – a planning document that provides for the construction of infrastructures with more than 6 trillion rubles. for six years.

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