Russian Economy Shows Recovery Signs

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Jul. 20 – Russia reported good economic results during the first half of the year, although investment activity remained low.

From January to July, Russia’s GDP grew by 4.2 percent compared to the same period last year, Elvira Nabiullina, Russia’s economic and trade minister said yesterday during the government session.

“This is quite a good dynamic for the economy to recover from the crisis,” Nabiullina said. “The export intensity – 50.1 percent growth for the first half of the year – was one of the primary factors which moved economy together with retail trade which grew by 3.4 percent. ”

The manufacturing industry grew by 10.2 percent during the same period while investments increased by only 1.3 percent. According to Nabiullina, automobile manufacturing, chemical, pulp and paper industries also showed positive growth.

“Economic regeneration is continuing, but investments are stagnating – in the first quarter of 2010 investments decreased, and finished the second quarter practically in a level of zero,” Vladimir Salnikov from Center for Macroeconomic Analysis and Short-term Forecasting told the Russian daily Vedomosti.

During the first half of this year, US$177 million was invested in the Russian commercial real estate sector. One of the biggest single transactions came from the US$60 million purchase made by the Tashir Group to buy the Europark shopping center  located on Rublevskoe Highway in April.

“Many investors consider that commercial real estate market of Russia has passed its bottom, which means that good moment for investment has come,” Jones Lang LaSalle Russia head of department Olesya Cherdantseva said, while added that majority of investment comes from Russian companies,  when “foreign investors still waiting for steadier trends.”

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