20.07.08

Russia’s statistics authority Rosstat reported yesterday the industry’s state in the first half of the year. The on-year growth was 5.8 percent (vs. 7.1 percent a year ago) and the acceleration slowed down to 0.9 percent in June (vs. the May growth of 6.7 percent), having shown the poorest result since the middle of 2002. The industry stagnated in June to the general astonishment of economic analysts. The consensus forecast of Interfax had been the industrial growth of over 5 percent.

Meanwhile, the production of crude oil continues to decline, having shed 0.8 percent in June and 0.6 percent in the first half-year, although the extractive industries stepped up 0.6 percent in June (0.1 percent in May) on the promising growth in gas production (3.9 percent).

The slowdown extended to the better part of basic industries. The losing leaders were food industry (oil production dropped 27.2 percent), pulp and paper industry (cellulose production shed 5 percent) and garment industry. Processing industry that surged 10 percent on year in May slowed down to 0.6 percent (8.4 percent in the first half of 2008, 11.4 percent in the first half of 2007).

Economic analysts don’t think the trend changed in June, reasoning that the average industrial growth is still 6 percent and giving various explanations to the current performance, ranging from tougher competition with import, capacity expiration in defense and industrial complex, football championship in June and Rosstat inaccuracy.

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Source: www.kommersant.com