Publication: Russia Economic Report, May 2017: From Recession to Recovery
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2017-05
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2017-06-30
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Global growth and trade started to strengthen at the end of 2016. Russia’s economy showed signs of overcoming the recession caused by the shocks of low oil prices and economic sanctions. Tradable sectors benefitted from the relative price adjustment and stabilizing commodity prices in the second half of 2016 and became the main drivers of economic growth, partly through increased exports. This report highlights the varying implications of the oil price shock on oil exporters, and how Russia has adapted well compared to others. SME is a priority sector for the Russian government that was hit the hardest by the recession as SME loans experienced the sharpest decline compared to other market segments. These, and other related disparities, are discussed in detail in the report. Part 3 of the report discusses in detail, Russian regions have weathered the slowdown in the economy fairly well in the recent past – showcasing low deficits and broadly moderate debt levels. The report elaborates, being among the top three oil exporters in the world, the Russian oil sector has demonstrated resilience, increasing production and exports despite headwinds, thanks to increased production by small- and medium size producers. Finally the report discusses various methods and measures of total factor productivity (TFP) growth in Russia, all which yield the same conclusion as summarized.
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“World Bank Group. 2017. Russia Economic Report, May 2017: From Recession to Recovery. © World Bank. http://hdl.handle.net/10986/27522 License: CC BY 3.0 IGO.”
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Publication Russia Economic Report, November 2017, No. 38(Washington, DC: World Bank, 2017-11)Global growth gained momentum in 2017. After slowing to 2.4 percent in 2016 as investment and trade weakened, global growth accelerated to a projected 2.7 percent for 2017.Moreover, the recovery has been broad-based.Global trade also continued to strengthen and external financing conditions remain benign.Amid these positive tailwinds, along with firming oil prices and growing macro-stability, the Russian economy returned to modest growth in 2017. The growth momentum of the second half of 2016 spilled over to 2017 and was especially strong in the second quarter this was supported by a rebound in domestic demand in the first half of 2017—which also contributed to a growth slowdown starting in the third quarter.On the production side, mineral resource extraction, transportation, and state management and provisioning for national security drove growth in the first quarter of 2017.Monetary policy remained prudent and consistent with the inflation-targeting framework. However, improvement in headline indicators masks underlying disparities and remaining vulnerabilities.Publication Russia Economic Report, No. 32, September 2014 : Policy Uncertainty Clouds Medium-Term Prospects(Washington, DC, 2014-09)Russia's economy is stagnating. Seasonally adjusted growth for the first two quarters of 2014 was near zero. Consumer and business sentiments were already weak in 2013 due to lingering structural problems and contributed to the wait-and-see attitudes of households and companies. Heightened market volatility and policy uncertainty due to geopolitical tensions during the first half of this year exacerbated this confidence crisis. The Russian economy needed to internalize several rounds of sanctions, countersanctions and measures to stabilize the economy; this environment of higher risk lowered domestic demand. While the macroeconomic stabilization measures were timely and successful, medium term policy objectives are still being defined. This continued policy uncertainty about the economic course of the country is casting a shadow on Russia's medium-term prospects. Prospects for further poverty reduction and shared prosperity are limited. In the past, rising wages and pension transfers allowed Russia to reduce poverty significantly and to expand the ranks of the middle-class. Unless structural reforms to expand the economy s potential are pursued, low investment makes it less likely that plentiful well-paying jobs will be created. High inflation, moreover, will slow real income growth and hurt consumption growth, dimming the likelihood for further poverty reduction and limiting the ability of the bottom 40 percent of the population to share in prosperity.Publication Russia Economic Report, No. 31, March 2014 : Confidence Crisis Exposes Economic Weakness(Moscow, 2014-03)Real Gross Domestic Product or GDP growth slowed to an estimated 1.3 percent in 2013 from 3.4 percent of 2012. In January 2013, we projected 3.6 percent growth for 2013, but while the global economy has continued to improve at a moderate pace, Russia's is struggling to find its footing. The first part of this report explores the recent economic developments that underlie this slowdown. 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The special focus note in part three discusses the link between Russia's growth in the past decade and how it fueled an unprecedented growth in household welfare.Publication Thailand Economic Monitor, April 2011(World Bank, Bangkok, 2011-04)The pace of economic activity is gradually returning to pre-crisis levels. After a roller-coaster of sharp drops, vigorous rebounds and mild contractions, Gross Domestic Product (GDP) was up 4.8 percent in the last quarter of 2010 on a seasonally-adjusted annualized (SAAR) basis, closer to pre-crisis, normal levels. For 2010 as a whole, GDP expanded by 7.8 percent from 2009. Growth was broad-based, with significant contributions from external and domestic demands. Thailand's economy is one of the most energy intensive in the region because of the large (and growing) share of energy-intensive manufacturing in the economy and high proportion of cargo transported by trucks. Thailand can reduce its vulnerability to oil price shocks by raising fuel standards, improving tax incentives for conservation and relying more on rail for cargo transport.Publication Russia Economic Report, No. 30, September 2013 : Structural Challenges to Growth Become Binding(Washington, DC, 2013-09)Russia's economy lost steam in 2013. Growth slowed to 1.4 percent in the first half (H1) of 2013, compared to 4.5 percent in H1 2012. This report examines in its first part several aspects of the economic slowdown. It shows that the slowdown was largely the result of weaker demand, which was due to a combination of external and domestic factors, some of which are cyclical and others structural. The structural challenges to the Russian economy and its growth, such as non-competitive sectors and markets, are another important factor to consider in the economic slowdown. The special focus note in part three of this report discusses the link between growth patterns in Russia, firm survival and diversification in manufacturing and will also highlight the impact of limited competition as a structural constraint. This note looks at the role of growth volatility as a possible explanation. It examines the role of surges and slumps in manufacturing output and its microeconomic implications in the dynamics of emergence and sustainability of nascent economic activities. The dynamics of the industrial output of the economy as whole, between 1993 and 2009, are the focus of this study. This note examines the downturns that magnify and accelerate the cleansing effects to the economy in forcing inefficient firms to exit, as well as the upturns that set the foundations of economic diversification by giving new economic activities the opportunity to emerge. This note has three main findings. First, Russian manufacturing output growth is characterized by a higher volatility than other comparator countries. Second, this volatility is mostly driven by more numerous, deeper and longer slumps and is mostly associated with aggregate slumps that have yearly effects. Third, while the economic surges increase the probability that productive firms remain in the market, the same is not true of economic slumps-older firms, not necessarily more productive ones, are more likely to survive the downturn. Furthermore, in sectors in which competition is less fierce, firms have a higher likelihood of weathering a slump.
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