RUSSIAN PRIVATE DEMAND WEATHERS THE STORM.Russian commercial activity was surprisingly unscathed this year as the Putin regime navigated around many of the economic potholes that threaten to derail de·rail intr. & tr.v. de·railed, de·rail·ing, de·rails 1. To run or cause to run off the rails. 2. economic growth. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a peak foreign debt, slumping oil prices, and the depressed global economic climate, Russias economy is experiencing year-on-year GDP GDP (guanosine diphosphate): see guanine. growth in excess of 5%. Stronger-than-expected oil export revenues earlier this year contributed to GDP growth. Another key element in maintaining a healthy rate of economic growth this year is consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and sales growth that is likely to exceed 6% year-on-year through the remainder of 2003. Consumer confidence slipped in March and April but should maintain an upward trajectory Trajectory The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight. through most of the second half of 2003. In part, increased confidence is linked to the slow but fairly steady drop in unemployment from 8.7% in 2001 to 8.4% at present. Double-digit growth in the level of foreign direct investment will contribute to job creation, with strongest growth linked to businesses that produce, distribute, and sell consumer goods. Real income rose in excess over 6% over the past year. That is attributable in part to the 4.7% increase in the value of the national currency (the ruble) relative to the US dollar so far in 2003. As a result, sales of household durables have been rising in the range of 5% to 10% in recent months and the growth rate could top 10% late this year and during the first quarter of 2004. Sales of imported durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. should rise at a slightly higher pace, although smuggling smuggling, illegal transport across state or national boundaries of goods or persons liable to customs or to prohibition. Smuggling has been carried on in nearly all nations and has occasionally been adopted as an instrument of national policy, as by Great Britain and black market practices will continue to undermine profits of legitimate retail establishments. The underlying problems that have kept most foreign investors at bay in recent years have not been resolved, but firm internal demand makes Russia an attractive market for risk-tolerant international suppliers of consumer goods and services. The growing middle class now accounts for almost 30% of the population and its continued expansion will be the driving force behind healthy private sector sales gains over the next few years. |
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