The Russian economy's high growth rates in early 2004 were determined more than 50 percent by high exports. On the other hand, despite the ruble's consolidation, imports growth slowed down while domestic producers significantly increased their contribution to the consumer goods and services market, the report says.
According to the Economic Development Ministry, the January-May 2004 macroeconomic figures give grounds to predict rather high annual growth rates, although probably not as high as last year's.
Thus, for instance, GDP is expected to grow by 6.6 percent year-on-year, as compared with 7.3 percent in 2003, whereas industrial output will grow 6.3 percent, against last year's 7 percent.
"The lower expectations for GDP growth in the year's second half are attributable to the so-called 'basis effect,' arising from the higher trajectory of growth in the latter half of 2003 and also from the projected decrease in world oil prices (down to $26 per barrel by the year's end)," the ministry says in its monitoring report.
In the first five months of this year, the ruble's value against the world's major currencies grew 5.6 percent, rising 4.3 percent against the U.S. dollar. The year's growth rate is expected at 7 and 5.7 percent, respectively.
The population's real incomes in the January-to-May period grew 9.9 percent as compared with the same period last year. This stepped up consumer demand, which, in turn, contributed to GDP growth, ministry experts say.
The contribution of household consumption to Gross Domestic Product growth rose to 4.7 percent of GDP in the first quarter of 2004, up from 3.9 percent in the same period last year. The favorable trade balance came to 30.8 billion in January-May 2004, increasing by almost 25 percent from last year's figure, $23.8 billion. This led an increase in the Central Bank's gold and currency reserves by almost $8.7 billion in January through May 2004, bringing them to $86.2 billion, as of June 11.
The Central Bank's gold and currency reserves fell by $3.65 billion in March and April, but were back on the rise in May, when they increased by $2.95 billion, Russia's Economic Development Ministry reports.
Foreign trade turnover in the January-to-May period came to nearly $100 billion. In the year's first five months, Russian exports amounted to 65.2 billion dollars while imports came to $34.4 billion. Exports totaled $13.7 billion in May; imports, $7.4 billion.
The year's foreign trade is expected to reach 157 billion dollars, with the favorable balance put at $63.8 billion.
The average price of the Urals crude oil was $30.6 per barrel in the January-to-May period of 2004, rising 13.3 percent from the same period last year. The average Urals price was 29.5 dollars per barrel in the first quarter of 2003; $24.1 per barrel in the year's second quarter; $27.2 in the third quarter; and $28 in the fourth.
The ministry has adjusted its forecasts for this year's average oil price, bringing the projected figure up to 29 dollars per barrel.
The inflation rate was 5.3 percent in the first five months of 2004, as against 7.1 percent in the same period of last year.
Ministry experts say that the lower inflation rate results primarily from restrictions on the rise of regulated prices and tariffs for energy products and from the growing value of the ruble. June's inflation rate is projected at 0.7 percent while the half-year figure is expected to reach the 6 percent mark.
Andrei Klepach, head of the ministry's macroeconomic forecasts department, said at a press conference earlier this week that the inflation rate was rather high for a summer period. He explained it by the current rise of food prices, which he said was a result of the higher price of gasoline. He assured his audience, however, that the increase in gasoline prices would not have any major impact on the macroeconomic situation and that the annual inflation rate would not surpass the projected 10 percent mark. It may do so only if the dollar-to-ruble exchange rate exceeds R30 (the dollar buys 29 rubles, on current rates).
