Output of the world’s biggest energy exporter shrank 8.9 percent in the third quarter from a year earlier, after contracting a record 10.9 percent in the previous period, the State Statistics Service said in a preliminary estimate on its Web site. From the second quarter, output grew a non- seasonally adjusted 13.9 percent. The office didn’t give a breakdown of the figures.
This year’s 80 percent rebound in the price of Urals crude, Russia’s biggest export, is pushing the country to recovery even as President Dmitry Medvedev called for an end to its humiliating” reliance on commodities. The economy may grow 3.2 percent in 2010 after slumping 8.7 percent this year, the World Bank said on Nov. 10, marking a bigger turnaround than Russia achieved after its 1998 debt default and devaluation.
Prime Minister Vladimir Putin has pledged 2.5 trillion rubles ($87 billion) in fiscal stimulus to offset the impact of the global recession on the commodity-reliant economy, where energy accounts for 70 percent of export revenue. The central bank has cut the key refinancing rate to a record low 9.5 percent as inflation eased.
The Economy Ministry last month said the decline eased to an annual 9.4 percent. According to the ministry, gross domestic product grew a seasonally adjusted 0.6 percent in the third quarter from the previous three months, and gained a seasonally- adjusted 0.5 percent in September from August.
Oil prices in excess of government estimates will help narrow this year’s budget deficit to 7.5 percent of GDP from an earlier forecast of 8.3 percent, Finance Minister Alexei Kudrin said on Oct. 21, enabling the government to maintain the stimulus. Its 2010 budget deficit outlook assumes crude will average $58 a barrel and rise to $60 in 2012.
Rising oil prices have also helped exports recover with sales abroad up 7.6 percent in September from August. From a year earlier, exports are down 33 percent, according to central bank data.
While higher raw material prices have helped commodity exporters and bolstered state finances, companies have lacked funding to invest in continued growth. Rate cuts have so far failed to revive bank lending, hindering companies’ efforts to stay afloat.
Lenders’ corporate loan books fell 0.7 percent in September from August after staying unchanged the previous month, the central bank estimates. Lending to consumers dropped 1.1 percent for an eighth consecutive monthly decline and delinquent retail loans climbed to 6.4 percent from 6.2 percent.