Updated May 21, 2008

   Rosstat data (Federal State Statistics Service) about an industrial production for January-April, 2008 showed more optimistic results as economists have been expecting. Industrial production volume for four months upped by 6,9%, and in April by 9,2% due to engineering and construction mainly. Oil extraction showed deceleration of decline rates in April. Some economists say they are ready to increase the forecast of the industry growth rates for 2008.

   Rosstat data about industrial production for April, 2008 were beyond economists’ expectations, who had forecasted the 6% growth. Statistics office reported that in April an industrial production volume has upped by 9,2% as compared to April, 2007 (in March – by 6,5%, in February – by 7,5% and in January – by 4,5%). This is the maximum growth since July, 2007 (10,3%). April permitted the industry to catch up with the last year’s indices: for January-April the growth was 6,9% as much as for the analogical period in 2007.

   "The April industry indices are higher than it has been expected, despite April, 2008 was one working day longer, and it is 1,4-1,5% additional growth. However, even 7,8% is a very high index for April", marks Vladimir Salnikov from Center for Macroeconomic Analysis and Short-term Forecasting. Sergey Ulatov from the World Bank says the industry high growth is a result of high investment demand in the state and private sector. Rory MacFarquhar from Goldman Sachs underlines that lending growth, despite the insignificant deceleration, remains at the very high level: 50% in April in annual terms. "This permits such industries like construction that are sensitive to loans availability degree to support high growth rates", he marks, and underlines that even Bank of Russia admits the forthcoming economy overheating. On the other hand, Stanislav Voskresenskiy, the deputy head of the Ministry of Economic Development and Trade, declared within the "Russia in the world economy" conference that "the economy overheating problem is only the Moscow city problem. The moment you leave Moscow, it becomes obvious that Russia’s economy needs more investments and there is no overheating", he underlined.

   Processing mainly continues to contribute to the industrial growth – construction, as well as industries related to it, and engineering also. In April, 2008 the processing productions upped by 14,5% as compared to April, 2007. In April production of cars upped by 28,8%, hydraulic pipes – by 77,6%, tractors – 2,1 times. In April brick output upped by 10,5%, constructions and reinforced concrete structures – by 11,2%.

   In April oil extraction demonstrated the first signs of recovery. The daily average oil extraction continued to reduce, but by slower rates as compared to the previous months. According to Rosstat data, in January, 2008 the daily average oil extraction went by 0,4% down, in February – by 1,4%, in March – by 1,6% and in April – by 0,4%. "It looks like the situation in oil industry is improving", says Vladimir Salnikov talks. And Sergey Ulatov supposes that one of the reasons is the internal demand growth for oil and new capacities introduction in oil processing. In the government hope the slump in oil extraction stops. As Vice Prime Minister Igor Sechin, who is responsible for development issues of fuel and energy sector and environmental management, declared that "by 2008 end oil extraction falling turns into growth".

   Some economists mark they are ready to review the forecasts of the industry growth rates in 2008 towards the increase. "It appears that growth will be higher than 6%", says Mr. Salnikov. And it is higher than the official forecast – 5,7%.