Econ Ministry keeps forecast for 2009 industrial decline at 11.5%
NOVO-OGAREVO. Dec 2 (Interfax) - The Russian Economic Development Ministry is maintaining its forecast for the decline in industrial production in 2009 at about 11.5%, Economic Development Minister Elvira Nabiullina said at a meeting with Prime Minister Vladimir Putin.
"The decline in industry will be about 11.5%," she said.
October saw a drop in industrial output (adjusted for seasonal factors) of 1% from September, primarily in manufacturing sectors, Nabiullina said. There was a 2.6% drop in machine-building and equipment manufacturing from September, she said.
However, GDP continues to grow, Nabiullina said, with the period June-October bringing 0.3-0.8% growth per month. Q3 GDP expanded 1.1% from Q2 (adjusted for seasonal factors). One of the main factors was export-oriented sectors such as metallurgy, chemicals, and oil-processing, which perked up towards the end of Q1, although that revival has slowed somewhat by now, she said.
Agriculture was another important growth factor, growing 11.7% from September after it expanded 5.4% during September itself (adjusted for seasonal factors). An unseasonably warm winter and late harvest contributed to this. For the period January-October, agriculture remained at roughly the same level as last year, but this year is expected to see 0.5% growth, Nabiullina said.
Putin responded to this by noting that growth could well have been greater if not for last year's record grain harvest. Nabiullina said that the meat and dairy industry posted 18% year-on-year growth in October. The example of government support in agriculture is expected to expand to other sectors, she said.
As to investment in fixed capital, Nabiullina said that the (seasonally adjusted) decline has halted, but there is as yet no significant growth. Seasonally adjusted investment grew 0.3% in October over the previous month. There was a roughly 18% drop in investment year-on-year in January-October, she said.
Growth is generally expected to continue through the fourth quarter Nabiullina said. "There is every possibility for keeping growth at 2% [Q4 GDP against Q3, adjusted for seasonal factors]," she said.