In Murmansk, a bleak economic outlook
The government of Russia’s most densely populated Arctic region does not foresee any any major economic upturn over the next years, a new forecast report indicates.
None of the region’s grand and long-awaited industrial projects, like the Shtokman project, the construction of a new railway line to the western shore of the Kola Bay and the development of new port and terminal facilities, will be launched in the period until 2015, if judging from the social-economic prognosis report adopted by the regional government last week
The report indicates only a slow economic growth and outlines no major new development drivers. The document is based on a mix of a socalled “conservative” and “moderately positive” outlook, Minister of Regional Development Sergei Agarkov said in a presentation of the report.
According to the figures presented, the Gross Regional Product will over the next three years in total grow between 6,7 and 7,5 percent and industrial production between 6,5 and 8,6 percent.
Investments are expected to grow steadily with between 7-8 percent per year and most of them will be connected with operations in the mining and metallurgy sector, as well as the development of the Murmansk Transport Hub and the construction of new nuclear-powered icebreakers. Also foreign investments is predicted a positive increase with 5,8 percent (2013), 9,4 percent (2014) and 5,9 percent (2015).
Minister Agarkov admits that the postponement of the Shtokman project has been a major disappointment for the regional government and that no Shtokman-related activities are included in the forecast.
At the same time, the Murmansk is steadily increasing its budget deficits, which in 2015 alone will amount to almost 25 percent. The budgets are socially-oriented, regional Minister of Finance Anna Uvarova underlined. In 2013, a total of 72,7 percent of the budget will cover social spending, a press release reads.
The drivers of the Murmansk regional economy will over the next years remain heavy industry like mining and metallurgy, both of them export-oriented sectors.
Meanwhile, the regional population will continue to shrink, expectedly to below 770,000 in 2015. Employment will decline from 8,8 percent (2011) to 7,5 percent in 2015. Following the negative demographic trends, a main challenges for the region will ultimately be a lack of qualified manpower, the authors of the report admit.