Publication: Monitor Volume: 6 Issue: 32

Vladimir Sokolin, chairman of Goskomstat (Russia’s statistical agency), told the Russian press on January 26 that Russian GDP grew by 3.2 percent in 1999, the fastest rate of growth since the mid-1980s. According to Sokolin, at the end of 1999 Russian GDP–despite a fall in output of 4.6 percent in 1998–was only 0.2 percent below its 1997 output level. These announcements have not yet been supported by official Goskomstat data and are difficult to accept at face value. According to official data released in late January, Russian GDP grew by 1.5 percent during the first three quarters of 1999, after being down 0.7 percent at mid-year. All output indicators continued to rise in the fourth quarter, indicating that Russia saw economic growth in 1999. If Goskomstat’s official output data for the first three quarters of 1999 are as a whole correct, however, then fourth-quarter GDP growth would have had to have surged by some 7-8 percent for annual growth to have reached 3.2 percent.

Such an increase for Russia would be both unprecedented and completely inconsistent with the released official 1999 sectoral output data, which has already undergone extensive revisions. Although industrial output was up 8.1 percent for the year, other key sectors such as retail trade, fell in 1999.

Overall, GDP growth is estimated at 1.8 percent for 1999, still the fastest rate since the 1980s. Fourth-quarter GDP, however, grew at a more realistic estimate of 2.5 percent. This follows Goskomstat quarterly GDP growth figures of -2.8 percent in the first quarter, 1.0 percent in the second quarter and 4.5 percent in the third quarter (United Nations Economic Commission for Europe, CIS Statistical Bulletin, January 2000).

Even if Russia did experience 3.2 percent growth in 1999, this would still leave GDP some 1.5 percent below its 1997 level–unless the official numbers for 1997 or 1998 GDP were to undergo substantial revision as well. Such statements by Goskomstat’s chairman raise more questions than they answer, and do little to increase the credibility of Russia’s official GDP numbers. Still, 1999 was Russia’s best year of the decade in terms of GDP, and only the second year in which GDP growth was recorded (following 0.8 percent in 1997). It was certainly an improvement on the decline recorded in 1998, virtually all of which occurred after the August financial crisis.