Russia's economy grew by an estimated 7.1 percent in 2004, the Federal Statistics Service said on Wednesday, beating official forecasts and leading some economists to question the figure's reliability. The stats office's first official estimate topped government expectations of 6.8-6.9 percent, and even trumped a projection of 6.5-6.7 percent made last week by its head, Vladimir Sokolin.
Some economists said it looked as though the headline number had been nudged higher to bring it closer to the annual rate of 7.2 percent needed to meet President Vladimir Putin's overriding policy goal of doubling the economy in a decade.
"Officials have an interest in seeing higher official GDP growth figures, as it keeps the economy on course to achieve President Putin's target," commented Alexei Moisseev, an economist at Renaissance Capital in Moscow.
Taking the full-year estimate and stripping out the first three quarters gives a fourth-quarter growth rate of 7.7 percent - which would be the year's fastest - said Rory MacFarquhar at Goldman Sachs.
That figure contrasts with business surveys showing growth slowing, the most closely watched being Moscow Narodny Bank's GDP indicator, which put fourth quarter growth at 4.5 percent.
MNB bases its GDP indicator on monthly surveys of purchasing managers in the manufacturing and services sectors.
It also runs counter to the darkening mood in Russia's business community in late 2004, as the Kremlin's attack on oil major YUKOS reached a climax with the forced auction of its main production unit Yuganskneftegaz to recover massive tax debts.
MacFarquhar said the full-year figure was based on more complete data - including returns from small businesses - than quarterly figures which could well undergo revisions when fourth quarter GDP numbers are eventually released.
"In principle this should be the right number and the problem is we have no choice but to believe it. It's not outrageous," said MacFarquhar. "My inclination is to give them the benefit of the doubt."
Growth in industrial production, which accounts for 28 percent of GDP by value-added, came in at 6.1 percent while harder-to-measure services - worth 59 percent of GDP - grew by 7.9 percent.
Looking at the consumption side of the GDP equation, there was a striking build of 40.5 percent in inventories which helped offset a 9.3 percent fall in net exports.
"The provisional aggregate figure appears to conflict with figures published earlier for monthly changes in basic macroeconomic indicators over the year," said Troika Dialog, chief economist Yevgeny Gavrilenkov.
Gavrilenkov added that the sharp growth in inventories was "an unusual result given that output of goods was reported to have decelerated significantly while consumption accelerated".
If true, the stockbuild may well point to leaner times ahead as firms will likely throttle back production to clear inventory backlogs, economists warned.
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