Weather-economy

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Погодозависимая экономика

It seems that the government economists decided that the weather is a very convenient reason to justify the failures in the economy.

The industry fell again in December last 2017, according to Rosstat, by 1.5% in annual terms. Yes that is something!
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Let me remind you that the November decline was generally 3.6 percent, and then as one of the most important reasons was named by the weather: as the November 2016 was cold, the basis for comparison was high. Now here is December 2017 was, on the contrary, very warm, because in this month the industry again showed negative.

It seems that the government economists really decided that the weather is a very convenient reason to justify the failures in the economy. So, waiting for the outcome of the January re-assessing the weather? Just bad luck: nothing “outstanding” nor the current January or January 2017 was not to tie the weather as the cause of another potential failure will be difficult.

The weather certainly has some impact on industry dynamics. Not surprisingly, for example, that when very cold, increasing the production of electricity and gas supply. It was in December 2016: the economic activity grew by 8.3%, the high base for comparison December 2017.

But at the same time, and it’s somehow forgotten, the same cold weather can slow down the dynamics of other economic activities within the industry. For example, when very cold, the falling construction and, accordingly, the production of construction materials. As already mentioned a cold December 2016 manufacture of other non-metallic mineral products (cement, tiles, bricks, blocks, etc.) fell by 4.9%, but a year later, in December 2017, it grew by 4.9% (against the background of the low base).

Why is this government and so the experts are not saying?

Weather, of course, a convenient reason, but really, when from month to month speak of it as almost the main reason for the current decline in the industry — this is not serious. By the way, in October 2017, when the industry has not increased (0%), with the weather-it certainly was all right. And?

In fairness, we note that in the whole year, the industry still showed growth by a symbolic 1%. However, this, first, two times worse than the official forecast of Ministry of economic development (plus 2%) for 2017. Secondly, it is important because how we finished the year and, accordingly, included the following: fourth quarter turned out to be disastrous — industrial production fell by 1.7% compared to the fourth quarter of 2016. And that is a falling trend started in 2018 for the industry.

Why is it necessary to pay attention to it? Because today, in Davos we once again heard from Russian officials that the Russian economy will reach the growth of 3-3. 5% in a couple of years. Again and again saying what is not true. Just don’t get tired of repeating this. Remember how in the early autumn of 2017 we were told that the economy is “gaining momentum” that it “has entered a new phase of economic growth” and so on?

In fact, the picture was just the opposite: not “went” and not “won” anything our economy. All correctional growth, more precisely, the rebound was over.

What about the weather? How’s the song? — “There is no bad weather…”, I paraphrase: “in a normal economy there is no bad weather, each weather — grace.”

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