What is the reason for the commodity dependence of the Russian economy?
Rosstat analyzed the data for 8 years and came to the conclusion that the commodity dependence of the economy has grown. The reason for this is an increase in production while manufacturing industries are shrinking.
For its calculations Rosstat took a new base year, which is considered to be the beginning of the reference year for analysis of growth rates. If earlier the base year was 2010, now the data from 2018 are taken into account. According to the updated results, in 2019 the volume of industry increased by 3.5%. There are some nuances in this analysis. When you take the data remote from the base year, there is a distortion of the results. To reduce the error, it is necessary to recalculate and move to the next base period every 5 years.
Special attention was paid to industrial production and its contribution to the country’s market when studying the state of the economy. According to Rosstat’s estimates, the total production of minerals has increased. In 2010, it accounted for 34.1% of the economy, while in 2018 it was already 38.9%. At the same time, the volume of manufacturing production decreased – from 53% to 50.7%. Now the share of enterprises engaged in the oil and gas segment is increasing in this structure, while the volumes of metallurgy and machine-building have decreased.
The published results show that this year industrial production will develop at a lower rate than it could. It should also be understood that the growth of production cannot be observed all the time, and now the dynamics will decrease. Due to the transfer to a new base year, the outlook for the industry is slightly less than experts previously thought.
At the beginning of this year, the segment’s growth slowed down to 1.1%. At the same time, Rosstat is confident that the recalculation of the base year increased the results of the previous period, against which a decline was observed.
The highest growth rates of the industrial sector were recorded in the first quarter of 2019. At that time the volumes increased by 5.2%. However, in the 4th quarter there were almost zero dynamics registered.
Analysts say that there is a difference in the ratio of indicators in industry to GDP. Therefore, it is correct to revise the GDP data for the last year. Another point is the volume of the mining industry, which may also be overestimated. In this case, the calculations took into account the price of oil, which was increasing in 2018, but in rubles due to the weakening of the national currency. Accordingly, the added value of the companies involved in the production of raw materials also increased.
It should be understood that the Russian economy is dependent on the extraction of mineral resources, but in the near future a decrease in its market share can be expected.