Regional economy: economic revival in most regions

Economic activity was reviving in the majority of Russian regions in December 2020—January 2021, despite the existing anti-pandemic restrictions. Price trends were still affected predominantly by temporary factors. The pandemic had a considerable impact on the labour market structure. Combined with a general decline in employment, this caused staff shortages in a number of industries. All these trends are covered in the new issue of the analytical review Regional Economy: Commentaries by Bank of Russia Main Branches.

The rebound of economic activity was driven by accommodative monetary conditions. Over December—January, mining enterprises expanded their coal and gas output. Economic activity also restored in construction and engineering, which pushed upwards output in metallurgy, metal processing, and wood processing. Pharmaceutical output also demonstrated steady upward trends, including as a result of a fast expansion of coronavirus vaccine production. The domestic tourist flow increased significantly during the New Year holidays as foreign destinations remained mostly closed.

However, not all economic sectors enjoyed positive changes. Anti-pandemic restrictions limit the provision of a whole range of services to households. Consumer demand bounced back notably during the New Year holidays, yet retailers primarily consider this trend to be temporary. Enterprises faced certain difficulties due to restrictions in Russia’s trading partners (e.g. in the fishing industry). A large number of companies complained about higher costs and increased pressure on prices, including due to a weaker ruble.

Nonetheless, companies’ estimates of the current situation and business climate prospects are improving. As individual regions eased anti-pandemic restrictions, the number of personnel in the service sector has started to restore.

The new issue includes special topics — the analysis of changes in the labour market and current trends in real estate.