Soft plunge into a crisis has severe consequences – FBK Economic Club experts

On March 26, 2013 in Moscow there was held the FBK Economic Club meeting “Two months of the industrial production fall. And then what?”

Opening the meeting Igor Nikolaev, director of the FBK Strategic analysis department has reminded that in 2013 statistics showed the negative results of the industrial production.   And if by results of January this rate made up -0.8 percent, in February the fall increased to -2.1 percent in comparison with the same period of last year. According to I. Nikolaev the leading indicators shows that negative trends will just grow. In particular by results of February there have been indicated the decline in transportation of construction materials to the level  12 percent, the trucks production decline made up 16 percent.”For the present the situation moves according to the scenario of gradual change for the worse. If in 2008 there was a steep drop and a steep rebound, since the middle of 2012 we have watched the slide gradual rates decrease, - the economist has noted. At that as the studies show the crises move so gradually are much direr than those ones that move in the form of avalanche”.

Natalya Akindinova, the director of NRU-Higher Economic School Development centre, has noted that “stagnation began long ago”: the signs of stagnation in all key branches of economy have begun to appear since 2011. “That is why the present figures are expected. They say that this trend is still in progress”, - the expert has noted. According to her the results of February were largely predetermined by decline of gas, electricity and water production conditional on various circumstances including the objective ones (there was one day more in February, 2012). “But it doesn’t cause optimism. There appeared signs of further worsening of this situation”, - N. Akindinova has stressed. She has also noted that the Cyprus situation will make its negative contribution to the subsidence of economical indexes. There will be appear substantial subsidence of so-called foreign investments in the Russian economy  as about 20 percent of foreign investments in Russia just fell on Cyprus share. “As a direct consequence of the Cyprus situation there can be the decrease of investments in Russian economy by 1.5 percentage points in annual expression. At that the GDP can decrease 0.3 percent”, - N. Akindinova considers.

Vladimir Milov, the director of the Institute of Energy Politics pays attention to the fact that for the first time since the late 80-s the decline of the oil extraction has been revealed. “It is still a little oil production falling – by one percent”, - Milov sites data. According to him this all was a direct consequence of “industry nationalization”. “We can’t find a driver of further growth, - the expert is reasoning. -  Unpleasant February’s figures show that the extractive sector had got negative results and pulled the situation down. But in manufacturing industry everything looks not so bad.  It is a paradoxical situation for today’s life – we have made a little step away from dependence on natural resources”.

Andrey Nechaev, the president of “Russian Financial Corporation“ bank,  is even more pessimistic: “We have entered the recession stage, - he says. - At that the advancing import growth in comparison with the export and foreign investments subsidence against the background of the record outflow of capital in January and February can be quite a challenge for the balance of payments”. In A. Nechaev’s opinion the sufficiently high inflation against the background of production falling can cause stagflation. At that “the external factors don’t allow us to expect that we’ll soon come out of the recession”, - the economist sums up.