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. Last Updated: 07/27/2016

May Figures Show GDP, Output Fall

Russia's economy showed no signs of a long-awaited turnaround in May, with gross domestic product declining by 7 percent from May 1995 and industrial output down 6 percent.


GDP was down 1 percent from April, and month-on-month industrial output was off 5 percent.


The figures, released Tuesday by the State Statistics Committee, are bound to be a disappointment to President Boris Yeltsin, whose campaign for re-election has emphasized that the worst is over for the battered economy.


Industrial output is already just half its level before the Soviet Union collapsed, which is highlighted by the Communists who want big handouts for state-owned firms in their nationalist-style campaign to make Russia great again.


"Politically, a fall in output is not good news for Yeltsin, especially at election time," said one Western economist, who did not wish to be identified. "There is a liquidity squeeze in the economy, and enterprises are being starved of working capital."


The average wage slipped 3.6 percent in May, to 747,000 rubles ($148) per capita, from 775,000 rubles in April.


The subsistence income -- the minimum needed to keep body and soul together -- rose to 378,000 rubles in May from 372,000 rubles the`previous month.


The committee said 28 percent of the population, or 42.2 million people, received less than a subsistence income.


Official Russian figures tend to underestimate the performance of the new private sector and ignore the vast "black economy" -- illegal, unregulated and virtually untaxed.


Yeltsin, who faces Communist Party leader Gennady Zyuganov in a run-off vote, brought in retired general Alexander Lebed, but economists said they did not expect the changes to have much effect on economic policy, although they could help Yeltsin politically in the second round of the ballot.