On the Release, by Rosstat, of Preliminary Estimates of RF GDP Growth in 2011
* Preliminary estimates.
Source: IMF (World Economic Outlook database); Rosstat.
Over the period of 2005-2007, Russia's stable economic growth was ensured by the increasing capital stock and labor resources resulting from investments. The major factor of growth in those years was the substantial revenues generated from exports in a situation of high international oil prices. Thus, for example, according to our estimates, while the actual growth rate of RF GDP in 2005 was 6.4% on the previous year, the share of the ‘situational' component in the GDP growth associated with the rapidly rising international oil prices amounted to 4.9% (or 76.6% of the actual growth rate of GDP); in 2006 it amounted to 6.1% (or 75.2% of the actual growth rate of GDP, which was 8.2% on the previous year)1. The main channels through which the rising prices of exported goods influence the rate of economic growth are, firstly, the increasing demand in the economy, and secondly, the inflow of resources into the economy which pushes up its production capacities.
According to our calculations, the years 2008-2010 saw a decline in the share of the ‘situational' component of GDP against the backdrop of the world economic crisis and plummeting oil prices. In 2011 there occurred a slight increase of that component - evidently as a result of the rising oil prices, whose level exceeded that of 2008, as shown in Fig.1. Simultaneously, over the same period, a negative contribution to the rate of economic growth in the RF was made by a component composed of other factors, including those relating to the business cycle.
These results testify, first of all, to the high dependence of the Russian economy on the situation in the world markets: during the periods of rising oil prices the share of the ‘situational' component in the rate of Russia's economic growth increases to a great extent, and then reduces to low values when faced with a slump in economic activity and a decline in oil prices.
Besides, it is necessary to stress that the currently available reserves of the effective factors (capital and labor) are insufficient for sustaining a high rate of growth in the RF economy - among other things, due to the underdevelopment of Russia's capital markets and the inflexibility of its labor market. These market deficiencies in their turn give rise to disproportional development of the various sectors of the economy, which is highly detrimental to efficient overall economic development. In our opinion, this is the reason why, at the current level of development of the Russian economy, the rising oil prices no longer result in a higher growth rate of GDP, as confirmed by the official statistical data.
So we believe that a continuing high dependence of Russia's GDP growth rate on the external economic situation represents a serious threat to this country's economic development (a point which is also emphasized by the International Monetary Fund in its forecast for Russia's economic growth in 2012 published in late January2). In order to counter that threat, the RF government should take responsible policies and measures designed to strengthen the role of the fundamental factors in Russia's economic growth, as well as to make that growth more stable.
M. V. Kazakova - Candidate of Economic Sciences, Head of the Economic Development Department
1 For more details concerning our calculation methods, see Kazakova M. V., Sinelnikov-Murylev S. G., Kadochnikov P. A. Analiz strukturnoi I kon"iukturnoi sostavliaiushchikh nalogovoi nagruzki v Rossiiskoi ekonomike. [Analysis of the Structural and ‘Situational' Components of the Tax Load in the Russian Economy.] Series Nauchnye trudy [Scientific Works] No 129. M.: IET, 2009 (http://www.iep.ru ).
2 See http://www.imf.org/external/pubs/ft/weo/2012/update/01/index.htm; also see http://www.vedomosti.ru/finance/news/1490207/tempy_rosta_rossijskoj_ekonomiki_ostalis_na_urovne_2010_g.