Russian economy: no miracles

Despite that the bottom-line figure of GDP growth in 2013 remains unchanged (1.3% relative to 2012), the quarterly dynamics differ drastically from the previously published data. For example, the economy saw the worst results in Q1 2013 followed by acceleration of GDP growth rates (by 0.5%, 0.8%, and 1% in Q2, Q3, and Q4, respectively).

Therefore, in H2 2013, Russia’s economic growth rate stood at about 4%. This is nothing but a miracle. Indeed, the revised Rosstat’s data are at least surprising amid adverse trends including subdued investment demand, decline in manufacturing output, reduced real household income and retail sales turnover, as well as already commenced fall in oil revenues (and therefore the worsening of the foreign economic situation as key economic growth driver in Russia for the time being), which are anxiously being discussed by the expert community.

It has to be said that, publishing the revised Rosstat’s data on 2013 coincided with publishing the results obtained using the revised GDP evaluation method in Nigeria. The Nigerian statistics service has made a great deal of progress in introducing telecommunications, e-commerce, and cinematography into Nigerian GDP. As a result, Nigerian GDP has almost doubled overnight, thereby making Nigeria the largest African economy (comparable with Russia “without snow” not only in relevance of the oil and gas sector, but also the level of institutional development, in particular corruptions scales) through almost tripled growth in the share of its service industry (from 29% to 53%).

Analysis of the foregoing makes one feel that in the modern world the role of statistics as economic performance measurement tool has been redesigned into an indicator of “success” for the current policy pursued by official public authorities. One may easily notice that the new 2013 results work perfectly in favor of the public authorities called for taking drastic measures to prevent the impending recession and guide the economy to a new, higher long-term development path. It turns therefore out that the economy can be quickly and painlessly recovered from stagnation by simply revising previously published statistical data while GDP increase by switching to a new method of evaluation of the same.

Maria Kazakova, Ph.D. in Economics, Head of Economic Development Department, Deputy Head of International Center for Budget Sustainability Study