icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
17 Dec, 2008 08:20

Downturn highlights Russia’s need for diversification

Industry in Russia suffered its worst month ever in November. Figures out on Tuesday show year-on-year production slumped more than 8%. Experts say Russia must cut its dependence on raw materials and diversify the economy.

November's industrial collapse was five times more than an economists' poll predicted. Refocusing their crystal balls, December's slump is now expected to be 19% year-on-year, and the first half of 2009 even worse according to Yaroslav Lissovolik, Chief Economist at Deutsche Bank Russia.

“We should be surmounting the depths of these difficult times in the middle of next year.”

Biggest fallers were the three pillars which make up 80% of Russia's economy – oil, gas and metals. Professor Ismail Erturk of the Manchester Business School says this is a wake-up call to the Kremlin.

“Relying on those industries is not enough, you always need innovative sectors where you have high value added.”

But Yaroslav Lissovolik says economic diversification is easier said than done.

“It takes not even years, it takes decades to diversify for an economy that is so dependant on export of raw materials.”

Finance Minister Aleksey Kudrin admits Russia is now heading for recession – two successive quarters of negative GDP growth. His Deputy Andrey Klepach says it'll last more than two quarters, and has already started.

Fesco boost 1H 2008 Net Profit 26%

Russian advertising industry braces for slowdown

Right hand drive ban shelved after 30% import tariff hike draws protest in Far East

Podcasts
0:00
27:48
0:00
26:46