Russian Economy General News: #13

Rosstat estimates economic growth in the third quarter, by Elena Rozhkova for RBC. 11.13.2024.

Rosstat announced a slowdown in economic growth in the third quarter to 3.1% against 4.1% in the previous one. However, the growth was better than the Ministry of Economic Development estimated (2.9%). According to the Ministry of Economic Development, the economy grew by 4.2% in 9 months.

Economic growth in the third quarter of 2024 slowed to 3.1% year-on-year against 4.1% in the second quarter of 2024, according to a preliminary estimate by Rosstat published on Wednesday, November 13. "The index of physical volume of gross domestic product in the third quarter of 2024 relative to the same period in 2023, according to a preliminary estimate, was 103.1%," the agency said in a statement. The data was again provided without taking into account statistical information on the Donetsk and Luhansk People's Republics, as well as the Zaporizhia and Kherson regions.

The preliminary ("zero") assessment was made using the production method (the sum of the gross added value of all industries). Thus, in manufacturing, the added value grew by 6% in the third quarter of 2024 (compared to the same period of the previous year), in retail turnover - also by 6%. The first GDP estimate for the third quarter will be published on December 13.

In the second quarter of 2024, according to Rosstat , GDP growth was 4.1% year-on-year, which is lower than the first quarter figure of 5.4%.

Despite the slowdown, Rosstat’s preliminary estimate was higher than the Ministry of Economic Development’s estimate published at the end of October (plus 2.9% in the third quarter).

The Ministry of Economic Development, taking into account the data received from Rosstat, has clarified its estimate of economic growth for nine months: it amounted to 4.2% compared to the same period last year, the press service of the ministry reported. "The main driver was the manufacturing industry, where the machine-building complex made the greatest contribution. Thus, high indicators were demonstrated by the production of individual vehicles and equipment (including railcars, diesel locomotives, etc.), as well as the production of computers and electronics," the press service quotes Lev Denisov, director of the Department of Macroeconomic Analysis and Forecasting of the Ministry of Economic Development. In his opinion, the high level of consumer activity is supported by the growth of incomes of the population.

Economists from the Institute of Economic Forecasting (INF) of the Russian Academy of Sciences previously pointed out the slowdown in the Russian economy . First of all, according to experts, it is caused by the ongoing tightening of monetary policy (the Bank of Russia raised the key rate to a record 21% on October 25) and a frontal increase in other costs: wages, transaction costs in foreign trade, tariffs for transportation and housing and communal services, and the introduction of additional fees.

Economists at the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) predict the possibility of stagflation in Russia, that is, simultaneous stagnation (or decline) and high inflation. Due to the Central Bank's tight monetary policy, according to CMASF economists, the situation may develop according to the scenario of "shock with a decline in production" with a high potential for corporate bankruptcies and an increase in non-payments. To prevent the GDP dynamics from going into negative territory, "the Central Bank's key rate should be reduced to approximately 15-16% by mid-2025, CMASF economists point out. The Central Bank's current forecast assumes an average annual key rate during this period at 17-20%.

Nevertheless, based on the calculations based on the statistics available at the beginning of November, the INP RAS raised its forecast for GDP growth by the end of 2024: they expect the economy to grow by 3.9%, which coincides with the official forecast of the Ministry of Economic Development (a month earlier, the INP predicted annual GDP growth of 3.7%). The Bank of Russia's forecast assumes an increase in GDP this year by 3.5–4%.

On November 8, the Bank of Russia reported that the dynamics of industry financial flows it monitors indicate a gradual slowdown in economic activity at the beginning of the fourth quarter. In October, the volume of incoming payments made through the Bank of Russia payment system decreased by 2.9% compared to the average level of the third quarter of 2024, the Central Bank indicated.

https://www.rbc.ru/economics/13/11/2024/6734c10a9a794733a77c0506

lancelot wrote:The main issue Russia has right now is lack of workers to fill the gaps in production of goods which used to be imported.

Since salaries keep rising I think you will see increased automation. Russia can still import machine tools from China and its own production of machine tools is rising many times over.

sepheronx wrote: Russia can never make up its fucking mind and streamline production.

caveat emptor wrote:
In Russia, in 2023, this figure will be 11 robots per 10,000 employees. Such data is provided in a study by Roscongress.

World rankings for 2022:

caveat emptor wrote:Their government owned companies have too many workers and worker productivity is low, as this was done in the past to keep people employed and employment low. For example, Gazprom has 500k and Rosneft 330k. So they can find some of the workforce there through optimizations.
Also, robotization levels are extremely low at only 11 robots per 10k in 2023, where world average is 151 per 10k workers in 2022.

https://mashnews.ru/robotyi-berut-promyishlennost-v-oborot.-v-rossii-obnaruzhen-vzryivnoj-rost-robototexniki.html

Quote from the article:

In terms of robot prevalence, Russia is far behind  the rest of the world. The world leader is South Korea (1,012 robots per 10,000 employees). Then come Singapore (730 robots per 10,000) and Germany (415 per 10,000).

In Russia, in 2023, this figure will be 11 robots per 10,000 employees. Such data is provided in a study by Roscongress.

World rankings for 2022:

flamming_python wrote:

Worker productivity is not low, when this metric was calculated properly some 5 years back, it turned out that Russian industrial workers were around 80% as productive as their equivalents in Germany.

flamming_python wrote:
Which is not bad when you take into account that Germany, per your statistics, has nearly x40 more robots per worker

Clearly this statistic is too vague to be useful.
Where are all these robots made use of in South Korea and Germany that they aren't in Russia? Which industries and factories?
And what type of robots?

flamming_python wrote:
Uralvagonzavod produces tanks far quicker than any German factory does. In fact no German factory produces tanks anymore at all, but if we take the Leopard 2 factory in Greece, then Uravwagonzavod still far outpaces them.
How many robots does Uralvagonzavod have on their assembly lines?
Does it have more than say an Amazon warehouse with all its robots that zip around with items all over the place? Probably not.

caveat emptor wrote:UVZ, at the moment can probably not produce more than 250 (it produced, at most, 120 T-90M tanks, not all NEW, in 2022 going by most optimistic estimates) new and modernized T-90M tanks, while it was producing 1500 NEW tanks in mid 80's and only for two years. It, now, has one full production line (second for Armata was never completed) and second is being used for upgrades of T-90 to T-90M. It had 6 full production lines (250 max capacity) in the mid 80's. Not to mention that at present time UVZ has over 30k workers working 12 hour shifts in 6 day work week. And all this while shuffling workers from civil production part of the plant to military part and bringing people from prisons. Also, Omsktransmash doesn't produce new tanks, but it is only doing upgrades, even if there were talks they will restart production of T-80.

lancelot wrote:
I doubt that yearly tank production at UVZ is only new 250 tanks. It could be that because they still have a lot of work to do upgrading older tank chassis or fixing damaged tanks. They could produce about that many tanks with peacetime production. In war time production with extra working shifts you can bet tank production will be higher.

And the Omsk plant is producing new T-80 tanks. This was publicly announced.

caveat emptor wrote:

" The IFR’s use of the term “industrial robot” is based on the definition of the International Organization for Standardization: an “automatically controlled, reprogrammable multipurpose manipulator, programmable in three or more axes, which can be either fixed in place or fixed to a mobile platform for use in automation applications in an industrial environment". (ISO 8373:2021) "

caveat emptor wrote:By most accounts, South Korea can produce most NEW tanks in the world (250 tanks)

Scorpius wrote:
In other words, "pseudo high-tech voodoo, which has an extremely limited range of applications in industrial technological operations."

Scorpius wrote:
One Uralvagonzavod CAN produce more NEW tanks than the whole of South Korea.