The statistical agency Goskomstat says gross domestic product rose 3.2 percent in 1999, the best performance since the mid-1980s. The figure is improbably high (it implies a fourth-quarter growth rate of 7-8 percent), but 1999 was the best year of the decade for economic growth. Industry led the recovery, with output growth of 8.1 percent, mainly in export and import-competing sectors where the 1998 devaluation improved competitiveness. High oil prices also contributed to rolling up a trade surplus of over $30 billion…. The expansion depends heavily on external factors and may not have much staying power. Retail trade rose in the fourth quarter–a sign of happier consumers, and the beginning of a recovery of living standards–but so did imports, by 20 percent. The ruble began to strengthen in real terms late in 1999, slowing growth in import-sensitive light industry. Most worrisome is that foreign and domestic investment remain extremely low, and capital flight remains high. A turnaround in world oil prices could quickly upset forecasts of 2-3 percent growth this year and send the economy back to stagnation or recession.