Global economic sustainable recovery forecasts have not been met: global GDP in 2012 grew by 2.3% which was 1.0 per cent lower than expected previously, according to The World Bank.
In 2012 US GDP grew by 2.2%, but EU GDP declined by 0.2%. During 2012, the global economy and steel market were in very difficult position. Chinese economy slowdown, European sovereign debt problems, US fiscal cliff tensions, bleak performance of emerging countries (India, Brazil, Russia) resulted in a sharp fall of raw material prices, which pulls down steel prices, as well. Central banks tried to support the economy by liquidity injections in the form of monetary easing in the USA, Europe, Japan. Many countries decreased interest policy rates in order to stimulate the economy, while inflation was under control.
Slow global economic growth could heavily impact the Russian economy. Recession risk could result in reduced demand for oil and gas, metals and other exported raw materials; destabilise the rouble; and spark capital outflow from Russia, along with increased inflation, production decline, increased unemployment and increased social risks.
Russian Federal State Statistics Service (Rosstat) estimated Russian GDP growth of 3.4% in 2012, which was below expectations. According to Rosstat estimates, Russia’s inflation in 2012 was 6.6%.
Given the large share of oil and oil products in the Russian export structure, the Russian economy is significantly dependent on price fluctuations for these commodities. In 2012, the average price of Urals oil blend, the main Russian export commodity, was US$108/bbl, which is 1.2% lower than in 2011. Nevertheless Russia finished the year with self-supporting budget, according to preliminary calculations of the Ministry of Finance. The Russian Ministry of Economic Development reduced their forecasts for Russia’s GDP for 2013 in the range of 3.0 to 3.2 per cent due to the escalation of the financial crisis in the Eurozone, the decline of raw material prices and the decrease in investments in risk regions. But the World Bank kept their forecast for Russia’s GDP at the level of 3.6 per cent.