Continued hardships in Arkhangelsk
Production figures, investments and budget revenues continue to decline in Arkhangelsk Oblast. One of the few positive trends in the region is the development of the agricultural sector, the latest Barents Monitoring reports reads.
The report, which is written by the Norwegian Barents Secretariat’s office in Arkhangelsk, gives a picture of a continued gloom in the regional economy.
The level of investments in the main capital is on its lowest since 2004. Likewise, the construction industry over the last nine dropped 47 percent year-on-year, a figure which places the region among the worst-off in Russia.
The timber industry, which provides 50 percent of the region’s industrial production, as well as half of all jobs in the industrial sector, developed slightly better than in other parts of Northwest Russia, but still saw a drop in output. While the wood production in July experienced growth, which compensated for the fall of the previous months, the months of August and September saw another downturn in this key sector. The third quarter results were down almost ten percent year-on-year.
The overall results for industrial production did show growth in the period (4,2%). However, this is all thanks to the higher oil production in the neighboring Nenets Autonomous Okrug, a region which administratively is partly included in the bigger Arkhangelsk Oblast.
The main positive trend is the situation in the food industry. This sector saw a considerable growth in meat production (+18%). Most of the segments of the food industry are developing on levels higher than in the same period of the last year. This fact could be interpreted as an import substitution effect, similar to the one experienced in Russia during the crisis of the late 1990s.
The steep economic downturn has resulted in a sharp decline in regional budget revenues. According to the Barents Monitoring report, the Arkhangelsk regional budget could this year get a deficit of up to 30 percent.
Together with a higher level of salary arrears, this could eventually lead to a heightening of social tensions. However, at the same time, the report confirms that unemployment remains at a low level. Only 2,5 percent of the work force is officially registered as unemployed.
