Russia's GDP grows 3.9% in H1 - Nabiullina
MOSCOW. July 21 (Interfax) - Russia's gross domestic product expanded 3.9% year-on-year in the first half of 2011, according to Economic Development Ministry estimates, Economic Development Minister Elvira Nabiullina said at a government presidium meeting on Thursday.
The ministry evaluates GDP growth just in June also at 3.9% year-on-year. Adjusted for seasonal and calendar factors, growth was 0.3% in June against May, after growth of 0.4% in May against April.
The rate of GDP growth is expected to quicken to roughly 4.5% in the second half, Nabiullina said.
"In general, the positive trend to GDP growth is pretty steady," the minister said.
The rosier outlook for second-half economic growth is due to a number of trends developing in the economy, including an increase in the pace of investment growth in recent months, Nabiullina said. The situation is improving in the construction sector, which has also begun to demonstrate growth. The situation remains favorable in industry, where there is strong growth in processing - 8% in H1. Industry generally expanded 0.7% in June against May (adjusted for seasonal factors), and the processing industry 1.1%, and there is growth in machinery, equipment, and metallurgy.
"Furthermore, the positive expectations are associated with agriculture," Nabiullina said. There will be strong growth in the second half, she said, and this is attributable to the fact that in the second half of last year "there was a low base associated with anomalous manifestations."
"This year there are good views of the harvest and of agriculture generally, which will also give the food industry a push," she said.
Speaking with journalists, Deputy Economic Development Minister Andrei Klepach said GDP data for June shows that "a trend of rather steady revitalization of Russian economic growth continues." There was in the second quarter a small slowdown in economic growth (in annual terms), he said. Growth amounted to 4.1% in Q1 and 3.7% in Q2.
Klepach noted there was a positive trend with investment in fixed capital in the second quarter. Investment slipped 0.8% in Q1 but expanded 4.9% in Q2, and was 2.7% for the first half as a whole. After an appreciable investment increase in May, it slowed somewhat in June, he said. June growth was 4.7% year-on-year (7.4% in May). Adjusted for seasonal and calendar factors, investment growth in June was 0.4% against May. In Q3 and Q4, Klepach said, "We reckon there will be a substantial quickening of investment, and our forecast for investment growth in 2011 is 6%, which I think right now is realistic."
Construction did not slow in June as did investment, but on the contrary sped up, he said, and came to 0.8% against May (adjusted for seasonal factors). "That investment slowed says that the volume of equipment purchases slowed, but construction volume is gathering turnover," he said.
Retail trade continued to show good growth in June, rising 5.6% year-on-year, and - adjusted for seasonal factors - increased 0.5% against May. "That is pretty good growth, and we are now running at higher than the current annual forecast [3.8%]," he said.
In June, for the first time since January, real personal incomes rose in annual terms - 0.7% against June 2010, and 2.7% against May (adjusted for seasonal factors), Klepach said. He noted that the Federal State Statistics Service (Rosstat) had revisited monthly real-wage dynamics for January-May, including credit-card spending abroad. "These are rather meaningful figures, because of which the entire picture changed," he said.
For H1 generally, real personal incomes decreased 1.4%, but Klepach said he expects an H2 turnaround to in the neighborhood of 1.5% growth. "Therefore, increased retail trade in June was supported not only by credits and reduced savings by the population, but also by rising incomes," Klepach said.
