World Economy

Russia Manufactures Grow

Russia Manufactures GrowRussia Manufactures Grow

Russia’s factory activity expanded in October, growing for the first time in 11 months thanks to higher domestic demand, a Markit report said.

The Purchasing Managers’ Index for the manufacturing sector rose to 50.2 from 49.1 the previous month, edging above the 50.0 mark that separates expansion from contraction, RT reported.

“Domestic demand is the principal driver of the expansion, with total new orders rising at the best rate for nearly a year,” said Markit’s senior economist Paul Smith. “That’s in spite of the sharpest fall in new export orders for three months.”

New orders rose for the second month running, with the related subindex rising to 51.6–the fastest growth rate since November 2014. New export orders fell in October, with roughly a quarter of manufacturers registering less business from abroad.

New business from foreign clients has declined in every survey period since September 2013, the report showed.

“There were also some positive developments for the sector on the price front, with rates of inflation for both inputs and outputs down markedly compared with September,” said Smith.

Consumer price inflation showed signs of easing last month, with the economy ministry expecting inflation in October to match the September level of 0.6% and down in annual terms.

Meanwhile, a recent report says, Russia managed to rise significantly in the World Bank’s ranking of countries’ business environment despite a deep recession and sanctions imposed by the West for its aggressions in Ukraine.

The World Bank reported October 27 that Russia’s “Doing Business” rating rose 11 points because of reforms addressing the registration of property, power supply reliability, and the transparency of electricity tariffs, among other measures.

The big jump in ratings raised Russia from 62nd place worldwide to 51st place–just shy of President Vladimir Putin’s stated goal of raising Russia ranking to 50 by 2015. Russia ranked as low as 120th in the world in 2011.

Some Central Asian countries whose economies are tied to Russia’s economy also improved markedly during the year.

The World Bank listed among its top 10 “improvers” Uzbekistan and Kazakhstan.

The report, now in its 13th year, looks at the regulatory environment for small and medium-sized companies to see how it hampers or helps them conduct business, from starting up and paying taxes to registering property and trading across borders.

“A modern economy cannot function without regulation and, at the same time, it can be brought to a standstill through poor and cumbersome regulation,” said Kaushik Basu, World Bank chief economist.