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In November 2014, investments in capital assets amounted to 95.2%, while in January–November 2014, to 97.2% on the respective index of the previous year. A long-term reduction of the volumes of building jobs may result in a dramatic drop in business activities in the business and investment complex early in 2015. The situation is made worse due to a sudden surge of the rate of inflation and growth in the cost of credit resources which situation limits the activities of private investors on the market.

The volume of investments in fi xed assets over the period of January–July 2015 in real terms amounted to 94.1%; the index for July dropped to 91.5% on the same month of last year. The structure of sources of investment fi nancing displayed a strengthening trend towards increasing the share of equity and federal budget funding. Over the fi rst half-year of 2015, the decline of investment in fi xed assets demonstrated by the segment represented by big and medium-sized enterprises amounted to 7.3% on the corresponding period of last year.

In H1 2015, business activities in the Russian economy were determined by weakening of the external and internal demand. In H1 2015, a decrease of 5.4% and 8.0% in investments in capital assets and the volume of the retail trade, respectively, as compared to the respective period of the previous year produced a negative eff ect on the domestic market. In Q2, the situation became more complicated due to a greater slump in the industry to 4.9%, including the manufacturing industry to 5.1% as compared to the indices of the previous year. A drop in real wages and salaries with a consolidating trend of growth in general and registered unemployment is an alarming factor.

Early in 2015, a further drop in investment activities was registered. In January–February 2015, investments in capital assets and the volumes of jobs in the building industry amounted to 93.6% and 96.7%, respectively, as compared to the relevant indices of the previous year.

In May 2015, investments in capital assets amounted to 92.4%, while in January–May 2015, to 95.2% as compared to respective indices of 2014. A drop in investments which continues for six quarters running has been determined by a decline of business activities since H2 2012 and made worse by the macroeconomic situation early in 2015 (due to that the share of borrowed funds in the pattern of sources of funding of investments kept decreasing), complicated budget situation in regions and reduction of domestic solvent demand (which situation results in a drop in investments in building, trade and the sphere of paid services). Instability of investment demand in the primary sector of the manufacturing industry which had a positive eff ect on the dynamics of the domestic production in Q1 2015 is of a particular concern. At the same time, the investment situation in the engineering sector demonstrates a certain potential of import substitution.

In April 2014, the economic situation was determined both by slowdown of growth rates of consumer demand and a drop in investment demand. Investments in capital assets in April 2014 and January–April amounted to 97.3% and 95.7%, respectively, against the respective indices of the previous year. A decrease in growth rates of retail trade sales volumes year on year to 2.6% was determined by dramatic slowdown of households’ real income and real wages and salaries. After a drop in January, year on year indices of industry demonstrated growth in February–April 2014. In April 2014, year on year growth rates of industrial production amounted to 2.4%, while in manufacturing and production of primary products, to 3.9% and 1.7%, respectively. However, despite the fact that the situation has improved to some extent the expected growth in industry in 2014 will amount by the estimate of the Ministry of Economic Development of the Russian Federation to 1.0%, which is justified by the expected 2.4% drop in investment activities in 2014.

Fixed investment in real terms stood at 97.42% in the period of January to July 2014 compared to the corresponding period in 2013. The structure of sources of fi nancing saw an upward trend towards the formation of a bigger share of equity at enterprises as the share of federal budget resources tended to diminish. In H1 2014, fi xed investment stopped falling in the segment of large and medium-sized enterprises, up by 2.8% relative to the corresponding period of the previous year, although it couldn’t off set entirely the negative growth dynamics observed in the preceding year. Investment upsurge in industrial and transport sectors had a positive eff ect on the dynamics of investment at large enterprises in H1 2014. Fixed investment kept diminishing in the investment and construction sector.

GDP advanced 0.8% in H1 2014 relative to the corresponding period of 2013, according to the preliminary data from Rosstat (Federal State Statistics Service). The products and services output index by basic type of economic activity remained near a positive value of 100.3% on an annualized basis in July 2014 compared to July 2013. The industrial production index stood at 101.5% in July 2014, including the manufacturing industry (102.4%) and the mineral extraction sector (100.2%). Reduction in both exports of traditional raw materials and their by-products, and the scale of output in the construction and investment sector had an adverse eff ect on the dynamics of general economic indicators..

In January–May 2014, capital investments in real terms amounted to 96.2% on the respective index of the previous year. In the patiern of sources of investment funding, the share of own funds and banks’ participation increased with a reduction of investment of federal budget funds. In Q1 2014, in the segment of large and midsized enterprises a drop in capital investments stopped and they increased by 1,8% as compared to the respective period of the previous year. In Q1 2014, a positive effect on the dynamics of investments by large enterprises was produced by growth in investments in the primary sector (5.4%), manufacturing (2.6%), oil refi ning (35.1%) and transport and communications (10.5%).

The situation in the investment sphere remains tense despite the fact that in November 2013 growth rates of investments in capital assets entered the positive zone and amounted to 100.2% year on year after a drop in the previous three months. In January-November 2013, investments in capital assets amounted to 99.2% of the level of the respective period of 2012. Despite a low base of December 2012, on the basis of the results of 2013 annual growth rates can hardly exceed those of 2012. Reduction of volumes of building with growing rates of commissioning of housing and reduction of volumes of incomplete building may result in a sharp drop in business activities in the building and investment complex early in 2014.

Falling investments in fixed assets in early 2014 were the result of the negative tendency which had formed in the construction investment complex in 2013. Investments in fixed assets in January-February this year were 95.0% while the volume of construction works was 96.2% of the corresponding indicator for last year.

In November 2014, a trend of weak economic dynamics intensifi ed. In November 2014, the industrial production index amounted to 99.6%, including 97.0% in manufacturing as compared to the previous year. Investments in capital assets fell by 4.8% as compared to November 2013; irregularity in fulfi llment of jobs in building intensifi ed. The situation is complicated by slowdown of growth rates of households’ real incomes by 4.7% year on year in November 2014 and growth in the rate of inflation to 9.1% as compared to November 2013.

In January 2015, a drop of 5.1% and 6.3% year-on-year in retail trade volume and investments in capital assets, respectively, had a considerable eff ect on the domestic market. The dynamics of the consumer market was determined by a simultaneous drop of 5.5% and 3.5% in demand on food products and non-food products, respectively, as compared to January 2014. In January 2015, the market of investment goods and services was characterized by a decrease of 3.5% year on year in building. In January 2015, industrial production increased by 0.9% year on year with growth of 1.5% in the primary sector and a drop of 0.1% in manufacturing. In January 2015, the total number of the unemployed and the number of the offi cially registered unemployed increased by 3% and 2.6%, respectively, but the above indices remained much below the respective values of January 2014.

According to the preliminary data of the Ministry of Economic Development of the Russian Federation, in Q1 2015 GDP amounted to 97.8% against the index of Q1 2014. A simultaneous shrinkage of consumer demand and investments in capital assets had a negative eff ect on the domestic market in 2015. In Q1 2015, the retail trade index and the index of investments in capital assets amounted to 93.3% and 94.0%, respectively, as compared to the same period of the previous year. The situation in the economy is complicated by a 8.3% drop in real wages and salaries and a 1.4% growth in the rate of unemployment as compared to Q1 2014.

In early 2015, Russia’s domestic market was strongly aff ected by the simultaneous shrinkage of consumer and investment demand. In February 2015, the retail trade turnover index amounted to 92.3% in annual terms; the index of paid services delivered to the population amounted to 98.5%; and the index of investment in fi xed assets – to 93.5% in annual terms. The beginning of 2015 was characterized by a profound deterioration of the indices of the population’s real incomes.

This year, Russia’s domestic market was operating under the negative eff ects of shrinking domestic demand. In July 2015, the retail trade turnover index amounted to 90.8%; the index of paid services delivered to the popula- tion – to 97.5%; and the index of investment in fi xed assets – to 91.5% in annual terms. Over the same month, output in the processing industries dropped to 92.9% on July 2014. The growth rates in the processing industries were negatively infl uenced by the shrinking output of capital goods.

Russia’s GDP in Q1 2015 stood at 98.1% compared to that for Q1 2014, according to the data provided by the Russian Federal Statistics Service (Rosstat). The economic dynamics in 2015 are aff ected by weakening domestic demand and the increased downturn in the consumer market. The retail turnover index in April 2015 stood at 90.2% and fi xed investments at 95.2% compared with that for the corresponding period last year. The economic situation has been deteriorating through a 13.2% decline in real wages and a 8.4% increase of unemployment rate compared to that for April 2014..

According to the preliminary estimates of the Ministry of Economic Development of the Russian Federation, in 2014 GDP annual growth rates amounted to 100.6% as compared to the previous year. Slowdown of growth rates of the Russian economy is justifi ed by low internal demand. Investments in capital assets fell by 2.5%, while growth rates of the consumer market slowed down to 2.5% as compared to 2013. In 2014, a positive trend was a speed-up of growth rates of industrial production to 101.7% with advanced growth in manufacturing (102.1% on the previous year). A negative factor of 2014 was a drop in households’ real income due to growth of 11.4% in the consumer price index in 2014. The situation on the labor market is getting worse: in December 2014 as compared to the previous month the total number of the unemployed rose by 0.9%, while the number of offi cially registered unemployed, by 7.5%.

The slowdown of the economic growth in April 2013 was determined by the slackening of the investment demand dynamics. In April 2013 the investments in fixed assets made 99.3%, in January– April – 99.8% of the corresponding indices of the previous year. However, the indices of the industrial production in March–April 2013 in annual terms demonstrate some growth after the recession of January–February. The growth rates of the industrial production this April in annual terms made 2.3%.

In Q1 2013 the slowdown of the economic growth was determined both by the decrease in the external demand by 4.6% versus the corresponding period of the previous year and the sudden weakening of the internal demand dynamics. In Q1 2013 the indices of the industrial growth and the volumes of investments in fi xed assets remained at the level of the previous year. The rates of retail trade turnover in Q1 2013 nearly halved as compared with the corresponding period of the previous year and made 3.9% while the growth rates of the real disposable incomes went up to 5.3% versus 1.6% a year ago. The level of the unemployment in Q1 2013 remained below the indices of the corresponding period of the previous year but exceeded the indices of Q4 2012

In January thru May 2013 capital investments in real terms stood at 99.6% on a year-on-year basis. An uptrend in corporate own funds and federal budget funds was boosted in the structure of sources of investment financing. In Q1 2013, investments dropped in real terms on a year-on-year basis by 11.4% in the extractive industries, 13.9% in the production and distribution of electric power, gas and water, and 19.1% in transport sector. The preceding-year uptrend in investments remained unchanged in manufacturing industry, but output declined due to ineffective usage of investments.

At the beginning of 2013 the economic activity continued to slow down – the process that started in 2012. In February 2013 the investments in fixed assets growth rates made only 100.3% in annual Terms.

In the fi rst fi ve months of 2014, the economic situation was determined by slowdown of growth rates of consumer demand and a drop in investments. In January–May 2014, investments in capital assets decreased by 3.8% against the index of the respective period of the previous year. In January–May 2014, the retail trade volume increased by 3.1% against 3.9% a year earlier. A positive contribution to the dynamics of the economic development is made by recovery of output growth in manufacturing. In January–May 2014, manufacturing output index amounted to 103.2% against 98.9% a year before with a high diff erentiation of production rates in diff erent sectors which situation is primarily justified by prevalence of negative trends in production of capital goods.

In January–September 2014, the index of physical volumes of GDP amounted to 100.8% on the respective period of 2013. The positive factors behind positive quarterly dynamics of GDP are, fi rstly, the speed-up of growth rates of manufacturing industries to 3.6% year-on-year in October 2014 against 0.6% a year before, secondly, growth in consumer demand though its rates are much lower than the index of October 2013 and, thirdly, growth in the net export despite a decrease in the foreign trade turnover. In January–October 2014, a 2.5% reduction in investments in capital assets on the respective period of the previous year had a negative eff ect on the domestic market.

In February 2014, industrial production increased by 2.1% on an annualised basis, including a 3.4% increase in manufacturing. However, the production of machines and equipment decreased by 11.4%, construction materials, by 2.0%, and construction works, by 2.4% in annual terms. Demand for services slowed sharply. In January-February 2014 the indices of retail turnover and paid services provided to the public were 103.2% and 101.0% of the corresponding figures for the previous year, whilst, in the year before that, these indicators had been 0.6 and 3.3 percentage points higher.

In January 2014, the macroeconomic situation is under the effect of the same factors which determined the economic dynamics in 2013. In January 2014, a drop of 7.0% and 5.5% in investments in capital assets and the volume of building work, respectively, against January 2013 had a substantial impact on the domes?? c market. Also, slowdown of growth rates of consumer demand on the commodity market (to 102.4% against 104.4% a year earlier) and the market of paid services (to 101.6% against 105.6%) was observed.

On the basis of the results of January–September 2013, the index of the physical volume of GDP amounted to 101.3% against the respective period of the previous year. With the existing dynamics of investment and con¬sumer demand, slowdown of growth rates of households’ income and decrease in the financial performance of enterprises and entities, on the basis of the results of 2013 the expected growth rates of GDP will amount to 103–104%. From June 201, growth in the rate of unemployment renewed which factor would make the situation more complicated on the labor market early in 2014.

In the 1st quarter of 2014, economic dynamics was determined by growth in consumer demand and a drop in investment demand. On the basis of the results of the 1st quarter of 2014, investments in capital assets fell by 4.8% on the respective period of the previous year with simultaneous reduction of volumes of jobs in building and production of capital goods. In the 1st quarter of 2014, growth rates of retail trade turnover amounted to 103.5%, which is 0.5 p.p. lower than the respective index of 2013. In January–March 2014, recovery of industrial growth thanks to a 2.4% increase in the output of manufacturing industries as compared to January–March 2013 had a positive effect on the economic situation. As of the end of March 2014, offices of the state employment service registered 941,000 persons as unemployed which is 13.2% lower as compared to March 2013.

In September 2014, the trend of slowdown of economic dynamics by the baseline types of economic activities stopped. Growth in industrial output, manufacturing and mining amounted to 2.8%, 3.6% and 2.4%, respectively, as compared to September 2013. However, the situation is complicated by the continued drop in investment activities. Investments in capital assets decreased by 2.8%, while the volume of jobs in building, by 3.7% as compared to September 2013. In September, year-on-year growth of up to 8% in the inflation rate and a 1% reduction in real wages caused a sudden slowdown of households’ consumer activities and the retail trade volume.

According to the RF Ministry of Economic Development’s preliminary estimates, GDP annual growth in 2013 was 1.3%, while its average per annum growth over the period of 2010–2012 had hovered around of 4.1%. The slowdown of Russia’s economic growth in 2013 was determined by a low domes?? c demand. Investments in fixed assets declined by 0.3%, and the consumer market’s growth rate dropped from 6.3% a year earlier to 3.9% on 2012. The processing industries displayed growth of 0.1% on 2012, while the quarterly rate of production decline in machine-building and metallurgy was on the rise against the backdrop of shrinking investment demand. Dwindling profits, rising production costs, an accelerated growth of wages vs. labor productivity, shrinking demand for labor all contribute to the very unfavorable business situation in 2014.

In H1 2014, the business activities in the Russian economy were characterized by slowdown of growth rates of the external demand on goods of the Russian export and termination of growth in domestic demand. In H1 2014, a 2.8% reduction of investments in capital assets and the minimum growth of 2.7% in the retail trade volume in the past 4.5 years as compared to the respective period of the previous year had a negative eff ect on the domestic market. A positive factor of the current year was a renewal of industrial growth with advanced rates of development of manufacturing.

At the beginning of 2013 the Russian economy was characterized by the slowdown of the internal and external demand. This year the domestic market was considerably infl uenced by the drop of production in February 2013 by 2.1% as compared with February 2012. The manufacturing industry index in annual terms made 99.9% versus February 2012 the deepest recession being observed in machine building complex. The total of the unemployed over January-February 2013 remained below the corresponding fi gure of the previous year, exceeding though the average fi gure of H2 2012.

In July 2013, the industrial production index stood at 99.3% in annual terms, including 98.5% in the manufacturing industry, and 100.4% in the mineral extraction sector. Slower growth rates in exports of traditional raw commodities and related refinery products made Russian economic growth rates even slower. Index of output of products and services in terms of basic types of economic activity remained within a positive values range in July 2013 vs. July 2012, because agricultural production increased by 5.8%, retail sales turnover by 4.3%, and paid retail services by 2.7%. Labor costs and physical resources kept growing against weakened competitive power and cost-effectiveness of the Russian economy.

In January–October 2013, business activities were determined by a decrease in the consumer and investment demand. A drop of 1.2% in investments in capital assets and stagnation in manufacturing industries as compared to January–October 2012 had a negative effect on the domestic market. A factor which supported the GDP dynamics at the level of 101.4% against January–February 2012 was growth of 5.3% in the agricultural output as compared to the respective period of the previous year. From June 2013, growth in the total number of the unemployed year-on-year was registered; it is to be noted that in October growth in the unemployment sped up and its level (in accordance with the ILO methods) amounted to 5.5% of the gainfully occupied population with 5.2% on average in the 3rd quarter of 2013. A drop in the demand in the workforce resulted in a reduction of the number of vacant jobs declared by the employment service from 2.1m vacant jobs in May to 1.6m in October 2013.

The results of January-September 2013 point to the continued trend in economic growth slowdown. Within the above period, the industrial production index amounted to 100.1% on January-September 2012, including that of manufacturing industry which was equal to 99.7%. The index of agricultural industry happened to be below the expected mid-year values and was at the level of 101.8% as compared to January-September 2012. In the building and investment complex, a slump intensified by quarters of the current year. In January-September 2013, investments in capital assets decreased by 1.9%, while in the 3rd quarter, by 1.2% on the respective period of the previous year. A drama?? c slowdown of the dynamics of GDP takes place with preservation of the trend towards growth in wages and salaries which situation increases the risks of downfall of financial indices of economic activities..

In Q3 2012 the GDP growth rates slowed down to 2.8% versus 3.9% in Q2 and 4.9% in Q1 2012. In September 2012 as compared with September 2011 investments in fixed assets contracted by 1.3% and workload in construction – by 5.6%. In September 2012 for the first time in the post-crisis period growth rates in machine-building were observed to be below the average for manufacturing production and for the industry as a whole. Economic growth rates slowing down, acceleration of growth rates of the real incomes of the population by 3.8% and of the real wages – by 6.6% versus September 2011 contributes to the trend of the production costs increase due to the growth of labor remuneration costs and leads to the worsening of enterprises’ operation results. The decrease of the general unemployment to the level that is the minimum for ten-year period can be characterized as a plus.

Russia’s economy was characterized by lessening of internal and external demand within the first five months in 2013. A drop in industrial output which in May 2013 reached 1.4% against May 2012 had a substantial effect on the domestic market in the current year. Stagnation in the investment sector further lowered production of capital goods and construction materials. The manufacturing output index stood at 95.6% in May 2013 on a year-on-year basis amid severe recession in the machine building industry. Growth rates in retail sales turnover slowed down to 102.9% on a year-on-year basis in response to a fall of 1.3% against May 2012 in real household disposable income. The number of the unemployed in May 2013 remained less than in May 2012.