RUSSIA |ECONOMICS. Slide 2 | September 2012 | Economics: Discovering Russia FSU GDP per capita, 1991 and 2011, $ Source: IMF

Evgeny Gavrilenkov +7 495 258 0521Evgeny_ [email protected]

Anton Stroutchenevski +7 (495) 933 9843Anton_ [email protected]

Economics:Discovering Russia

RUSSIA | ECONOMICS

Slide 2 | September 2012 | Economics: Discovering Russia

FSU GDP per capita, 1991 and 2011, $

Source: IMF

0

3,000

6,000

9,000

12,000

15,000

18,000

Arm

enia

Aze

rbai

jan

Bel

arus

Esto

nia

Geo

rgia

Kaz

akhst

an

Kyr

gyz

stan

Latv

ia

Lith

uan

ia

Mold

ova

Russ

ia

Tajik

ista

n

Turk

men

ista

n

Ukr

aine

Uzb

ekis

tan

1991 2011


Estonia

LatviaLithuaniaRussia

Kazakhstan

Ukraine

MoldovaKyrgyzstan

Armenia

TajikistanUzbekistan

Georgia

Turkmenistan

BelarusAzerbaijan

0

3,000

6,000

9,000

12,000

15,000

18,000

0% 30% 60% 90% 120% 150% 180%External debt/ GDP

GD

P per

cap

ita,

$

FSU GDP per capita and external borrowing, 2011

Source: IMF, CIA, national banks

Russia’s wealth is not dependent on borrowing


Nominal GDP correlates with the oil price, the former having doubled since 1998 in real terms…

…while the latter has risen even more in nominal terms.

Nominal GDP Real GDP

Source: State Statistics Service, Sberbank Investment Research Source: State Statistics Service, Sberbank Investment Research


… but the export structure is biased toward fuel

Source: State Statistics Service, Troika estimates

Russian export (left pie) and import breakdown, 2009

68%

11%

6%

6%3%

6%

Fuel

Metals

Chemistry

Machines and equipment

Food and agricultural products

Other

43%

18%

17%

6%

6%3%3% 4%



Chemistry

Metals

Textiles

Wood and pulp

Fuel

Other


Largely due to oil price inflation, fuel’s weight in exports even increased…


Russian export (left pie) and import breakdown, 1995

42%

27%

10%

10%

6%2%3%

Fuel

Metals

Chemicals


Wood and pulp


Other

34%

28%

11%

9%

6%

6%2% 4%



Chemicals

Metals

Fuel

Textiles

Wood and pulp

Other


… as well as in federal budget revenues


Russian federal budget revenues breakdown, 2010

46%

54%

Oil and gas

Non-oil and gas


Since 1999, growth has largely been driven by rising total factor productivity (TFP)…

Source: State Statistics Service, Sberbank Investment Research

…but capital accumulation has recently become an equally important driver


TFP improved almost in all sectors of the economy


Average contribution to the value added between 2012 and 2004


Real value-added growth in raw material extraction has been moderate, 2004=100%


90%

100%

110%

120%

130%

140%

150%

2004 2005 2006 2007 2008 2009 2010 2011 2012

Raw materials extraction Manufacturing Other GDP at basic prices


The fuel sector’s direct contribution to GDP is insignificant…

Note: The tradable sector includes manufacturing industry (excluding fuel processing) and agricultural sector


Russian GDP breakdown, 2009, basic prices

8%2%

18%

3%

6%

63%

Fuel extraction

Fuel processing

Tradable sector

Supply and redistribution ofelectricity, gas and water

Construction

Services


Breakdown of value-added and employment by industry, 2011

* value added is calculated at basic prices


Value added,$ bln

Employment,mln

Value added peremployee, $ ’000

Agriculture 63.7 6.4 9.9Fishing 3.3 0.1 23.8Raw materials extraction 167.8 1.0 160.3Manufacturing 251.7 10.8 23.2Supply and redistribution of electricity, gas and water 59.9 2.0 30.2Construction 102.9 5.6 18.4Retail 298.3 13.9 21.5Hotels and restaurants 15.1 1.3 11.6Transport and communication 140.0 5.5 25.3Finance 65.1 1.2 53.1Real estate 184.0 5.5 33.4State administration, military, social services 90.3 3.8 23.7Education 45.0 5.9 7.6Health care 58.0 4.9 11.9Housing and social services 22.8 2.7 8.5

Total 1567.8 70.8 22.1


Consumer goods Intermediate goods Investment goods

2006 46.2% 36.8% 17.0%2007 44.4% 36.7% 18.9%2008 41.8% 34.4% 23.8%2009 44.3% 36.0% 19.7%2010 40.4% 40.1% 19.5%2011 36.7% 42.0% 21.3%

Source: State Statistics Service

The import structure reflects changes in economic development


Domestic demand remains a key driver of economic growth


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RUSSIA |ECONOMICS. Slide 2 | September 2012 | Economics: Discovering Russia FSU GDP per capita, 1991 and 2011, $ Source: IMF