The Moscow Refinery suspension affected the industrial growth of financial and economic centers

1 august 2017 | RBC

The industrial growth in Moscow and St. Petersburg has been followed by a recession as reports RBC with a reference to the "Industrial Production Trends: Regional Inequality" bulletin of the Analytical Center. The industrial production rates of several financial and economic regions (Moscow, St. Petersburg, Moscow Oblast) declined by 6.3 % in January-May 2017 in comparison with the same period of the previous year and sharply contrasts the last year's trends (based on the data of the Federal Statistics Service). Analysts associate these changes with the repair of the Moscow refinery. "The enterprise owned by Gazprom Neft closed in January and resumed its work in May," an expert of the Analytical Center Alexander Golyashev explained to RBC. "Since there are few industrial enterprises in the three regions, the suspension of the refinery has contributed largely to the recession." Another reason for such changes in metropolitan cities' production trajectory is the transition of the Federal statistics Service to a new version of OKVED — OKVED 2, says the bulletin.

Alexander Golyashev
Alexander Golyashev
Department for Research Studies

"The second half is likely to be positive for financial and economic centers, but at the end of the year the industry will be at the zero level, and more likely at the negative one," Mr. Golyashev added.

According to the bulletin, in 2016, 21 % of the goods shipped were accounted for Moscow, Moscow Oblast, and St. Petersburg, which are considered as highly developed regions by analysts. At the same time, according to the Analytical Center, industrial production increased by 3.2 % in Russia in 2016 and experienced an increase of 1.5 % in the first five months of 2017. The Federal Statistics Service has different data adjusted for the informal sector — 1.1 % and 1.7 % respectively.

According to the Analytical Center experts, the highest rates of industrial growth in the first five months of 2017 were experienced by the "less developed agrarian regions" — an increase of 13.3 % in this group was triggered by the launch of the first stage of Kimkano-Sutarskiy Ore Processing Enterprise, which boosted the extractive industry output in the Jewish Autonomous Region by 8.6 times. In general, 2/3 of the industrial output in Russia in 2016 accounted for only 20 regions. Among them were financial centers (Moscow and St. Petersburg), export-oriented raw material regions such as Khanty-Mansi Autonomous Okrug and Yamalo-Nenets Autonomous Okrug, and developed regions with a diversified economy (Tatarstan and Sverdlovsk Oblast).