On “The Forecast of the Socio-economic Development of the Russian Federation for the year 2011 and the Planning Period of 2012 and 2013”

 

This year it was agriculture that most palpably contributed to the deterioration of the macroeconomic situation. The volume of agricultural production, as seen by the year’s results, is estimated to be at the level of 90.1% of the previous year’s index. 

This year, the investment activity has also been demonstrating a marked degree of instability. As stated in the RF Ministry for Economic Development’s forecast, in 2010 the level of investments in fixed assets are going to rise on the previous year by 2.5%, while there will still remain a downward trend with regard to production volumes in the construction industry (99.6% of the 2009 level) notwithstanding a stabilization of the rate of new housing being put in operation. 

Exports remain one of the major factors of economic development in 2010. However the impact of net exports on economic development is becoming weaker in face of an accelerated growth of imports relative to the levels of external demand and domestic production. 

One most important factor of domestic demand in 2010 has been the reestablishment of the former level of consumer spending. According to forecasts, the volume of turnover of commodities will reach its 2008 level, while real wages will exceed by 1.2% their indices recorded in the pre-crisis period. 

This year is expected to see some significant changes in the inflation background. In the first half-year 2010, low international prices for foodstuffs and significant demand-linked restrictions resulted in a rapid decline of the inflation indices. By late 2010, the growth of consumer prices, alongside the difficult situation in agriculture, a higher expected inflation rate as a result of the dwindling supply of some commodity items and the accelerated growth of prices as established both by suppliers of raw materials and by the processing companies, in accordance with the forecast of the RF Ministry for Economic Development will increase by 8 % against the previously cited 6–7%.

The expected industrial production growth in 2010 will amount to 107.6%, including that in the processing industries of 109.9%. 

One of the main problems faced by the Russian economy has been a low labor productivity level resulting from the very unsatisfactory technological properties of fixed assets, lack of rationality in the use of workforce and a deficit of highly qualified cadres. In a situation of crisis, the issues of employment optimization and the need for reducing labor costs have become more acute. In 2009, as estimated by the RF Ministry for Economic Development, labor productivity in Russia with regard to work time dropped by 2.2%, while labor productivity per employee dropped by 5.8%. Thus, production decline in crisis conditions was not accompanies by a corresponding decline in the employment indices, and so the resulting unemployment became latent – in the form of partial employment and temporary leaves initiated by employers. 

It is expected that in 2010 production growth will amount to 3–4.5%, thus remaining at a level lower than the forecasted growth rate of wages.

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