How the decline in industrial production in Russia affected the indicators of 2020
Last year was a real test for Russia’s global economy. The quarantine restrictions coincided with a decline in energy demand and crises in the oil market, which led to the collapse of the ruble. According to statistics from Rosstat, there was a 2.9% decrease in industrial production in 2020. However, according to experts, this figure was lower than forecasted in spring and summer.
In addition to the negative effects of the pandemic, the decline in demand for Russian energy was due to the warm winter of 2019/2020, when many importers of gas and coal purchased smaller amounts of raw materials from Russia than in previous periods. In addition, the country signed the OPEC+ agreement, which resulted in an 8.1% drop in Russian oil and gas production.
In December 2020, industrial output showed a decrease of 0.2% compared to the same period in 2019. At the same time, when comparing the results with November 2020, growth was observed at 10.5%, which was the highest level for the year.The industrial recovery began in early summer, gradually picking up to catch up with 2019. The results of December were positive, and the same dynamics persists this year. At the same time, for a long time the indicators of production and refining remained insufficiently high, and enterprises were working in deficit. Only a few months ago, the situation began to change in a positive direction.
This industry occupies a key share in the entire industrial complex, which means that it is extremely early to say that the segment has recovered. The first quarter of the current year showed the indicators of production of raw materials with minus values, but since the second quarter the processes of recovery were fixed. The main stimulus for the oil industry to recover from the crisis is an increase in demand at the global market. In this case, the impact of global processes and events in individual states is great.
As for the overview of the industrial production sectors, since 2020 the enterprises for the production of pharmaceuticals and medical materials and textile products have shown good dynamics. Chemical production and the food industry are performing well.
In addition to oil production and refining, the automotive industry, the production of non-metallic minerals, coal, gas, and metallurgy suffered. Moreover, the industrial sector was also affected by specific factors. For example, the sugar industry was in surplus production in 2019, which significantly reduced its value. However, consumption in the country increased in 2020, and producers decided to raise the cost of products, causing a stir in the market. Demand for buckwheat increased, but overall its production fell last year.