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. Last Updated: 07/27/2016

NEWS ANALYSIS: Economists Question 3.2% Growth Report




The government boasted Tuesday that gross domestic product experienced a robust 3.2 percent growth in 1999, but economists' reaction Wednesday to the data was mixed. While some of them agree the economy is on the rise, others question the reliability of the preliminary public statistics.


The government had earlier forecast GDP would grow 1.5 percent to 2 percent last year, after January-September GDP was up 1.5 percent.


"The figures are consistent with the data that we receive from manufacturers," said Chris Williamson, a senior economist for NTC Economic & Financial Research, a British-based provider of business information that compiles The Moscow Narodny Purchasing Managers' Index.


The index surged to 57.6 in December, well above November's 57.1 and the 57.4 of the previous two months. Index values above the bench mark of 50 indicate an economy will expand.


But many analysts suggested the government is playing with figures and are waiting for the final data to be released.


Only 0.4 to 0.5 percentage points of the difference can be explained by a strong economic performance in the fourth quarter, United Financial Group brokerage reported Wednesday.


"We believe that the rest of the difference is a result of manipulation, with adjustments for the shadow economy."


"We would like to see the final statistics, which the government will disclose in February," said Katya Malofeyeva, an analyst who tracks macroeconomics at Renaissance-Capital investment bank.


Alfa Bank reported Wednesday that the nominal GDP figure of 4.47 trillion ($188 billion) implied that nominal GDP surged from 451 billion rubles in November to 634 billion rubles in December.


Such a difference could not be explained by seasonal factors, which usually make up for 4 percent to 6 percent of growth in December, and it also remains unclear which figure was used to calculate the GDP deflator, which adjusts for changes in prices and composition of the economy.


The deflator is close to the Consumer Price Index in countries with low inflation, but in Russia the Producers Price Index surged 67 percent vs. CPI's 36.5 percent in 1999, creating uncertainty over how to calculate the deflator.


"Using the PPI index, real GDP growth was actually closer to zero," Alfa Bank stated in its Wednesday morning brief.


Economists now want to see how the Russian Statistics Agency will change other figures to substantiate a growth of 3.2 percent.


"I think that they will change the basis of their calculations, revising figures for previous years," said Yevgeny Gavrilenkov, deputy head of the Bureau of Economic Analysis.


Statistics could be influenced by inefficient methods and, to a lesser extent, by political considerations, he said.


In fact, some figures reported this week already do not exactly match up.


Vladimir Sokolin, head of the Russian Statistics Agency, said Tuesday that last year GDP was only 0.2 percent lower than in pre-crisis 1997, but the economy contracted 4.6 percent in 1998 and even growth of 3.2 percent last year could not make up for the decline.