CIS shows signs of economic stagnation in H1’13 - statistics

    Charles van der Leeuw
    Recently released figures by the Moscow-based Interstate Statistics Committee of the Commonwealth of Independent States, which unites all former Soviet republics except for the three Baltic states which have joined the European Union and Georgia which split off in the wake of the latest armed clash with Russia over the breakaway territory of South Ossetia, show a rather severe economic setback for the rest of the former USSR Gross domestic product in the CIS in the said period have decreased to 2 per cent on average in the first six months, down from 4.4 per cent on-year in the first half of 2012 – even though industrial output witnessed a reverse trend from a net decline of 0.2 per cent in the first six months of 2012 to an increase of 2.7 per cent so far this year.
    Unlikely wealth accumulators such as Turkmenistan, Uzbekistan, Kyrgyzstan, Tajikistan and Armenia head the list of the CIS states in terms of overall economic growth in the first six months. Increases in their GDP stood at 9.4, 8.5, 7.9 and 7.5 per cent respectively (see table below) – as compared with the Russian Federation with 1.6 and Belarus with 1.4 per cent, with Ukraine having suffered from a net decline of 1.1 per cent on-year. Kyrgyzstan also topped the list in terms of increase in industrial output of a rather spectacular looking 18.4 per cent.
    Kazakhstan posted a net increase year-on-year of 4.7 per cent through the first half of the current year, thereby caught in the middle amidst most of the other CIS states but still well above average. According to the country’s national statistics agency, trade and communication are the main drivers of economic growth with increases of 12.5 and 14.6 per cent respectively, followed by transport with 7.1 per cent. Industrial output increased by 1.8 per cent, agriculture by 1.4 per cent and construction by a mere 0.7 per cent in the period. Trends for Kazakhstan into the second half of the year tend to look rather hopeful. “For the period from January to July 2013, the volume of investments in fixed assets amounted to 2.8 trillion tenge, having increased by 7.1% in comparison with the same period last year,”
    Kazinform reported in an update, quoting the Chairman of the Statistics Agency Alikhan Smailov. “The volume of investment in fixed assets in January-July 2013 amounted to 2.8 trillion tenge, which is 7.1 per cent more than in January-July 2012,” the official was quoted as adding. “He noted that the volume of industrial production in comparison with the same period of 2012 increased by 1.9 per cent to 10.2 trillion in current prices,” in Kazinform’s words. “For example, production in the mining sector increased by 2.6 per cent, processing industry by 1.3 per cent, in electricity, gas, steam supply and air conditioning by 0.8 per cent. The volume of gross output of agriculture also increased to 681.1 billion tenge. The volume index in the transport industry was 107.2 per cent in January-July 2013.”
    Investments in the CIS in the first six months have shown a trend similar to that of overall growth in its member states’ national economies. Average investments in the Commonwealth increased by 1.3 per cent on-year, against 11.8 per cent in the first half of 2012. The setback was mainly carried by a net decline in the Russian Federation of 1.4 per cent – set against an increase of 12.8 per cent on-year in the first half of 2012.
    Investments in Kazakhstan increased by a healthy looking 7.9 per cent – even though it should be taken into account that the bulk of investments go to the oil industry. On the whole, most countries in the CIS have shown improvements in their investment attraction with once more unlikely candidates Kyrgyzstan and Tajikistan topping the list with impressive increases of 35 and 21.9 per cent respectively.
    Industry costs in the CIS have been significantly stabilised and in a number of cases even reduced since they tended to go through the roof by the latest turn of the decade. As figures show, this has led to modest trends in consumerp i]price indices. Only in Uzbekistan industrial producing prices have been up by more than 10 per cent on-year – even though no inflation indicator has been given.