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Economic development of the Republic of Karelia in 2003

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General characteristics of social-economic situation in the Republic of Karelia

The basic efforts of the Government of the republic in the field of social and economic development were concentrated on maintenance of steady functioning and development of the real sector of economy and social sphere, and performance of the forecasted parameters. Due to the measures undertaken it was possible to suspend development of the negative tendencies planned in the beginning of 2003, and to keep positive changes of the basic social and economic indices.

By estimations, in 2003 the total regional product has increased 2% in comparison with 2002.

The volume of industrial output has made 38 billion roubles and has grown 15% in established prices in comparison with 2002. The index of physical volume of industrial output has made 100.8% to the level of 2002, 103.3 % on a circle of large and medium enterprises.

Growth of physical volumes of manufacture has been noted in the majority of industries: woodworking industry (111.4%), manufacture of building materials (107.8%), ferrous metallurgy (105.2%), engineering industry and metal working (106.7%), logging industry (102.5%), pulp-and-paper industry (107.3%), light industry (102%), polygraphic industry (104.3%).

At the same time it was not possible to achieve rates of growth as a whole on the industry due to backlog in electric power industry (96%), food (66.5%), including fish industry (55.5 %), and flour-and-cereals industry (58.9%) stipulated in the forecast of social and economic development of the Republic of Karelia for 2003.

In 2003 the agricultural organizations have increased realization of meat, milk, and eggs 9%, 2% and 8% accordingly to the level of 2002. Growth of volumes of manufacture in cattle breeding has been achieved due to increase of efficiency of cattle and poltry.

The transport infrastructure has been developed. Due to means of the Territorial Road Fund 31,6 kms of highways with 6 bridges in the extent of 239 running metres was constructed in Karelia in 2003. Besides, over 68 kms. has been constructed and reconstructed on federal road Kola. Construction of the gas pipe line from Petrozavodsk to Kondopoga upon which implementation the thermal power station of Kondopoga Open Society will be switched to natural gas proceeded. Electrification of the site of railway from Sumposad to Malenga by extent of 75 kms was completed. Due to means of the federal budget reconstruction of the White Sea-Baltic channel, the important transport artery, proceeded.

Favorable market conditions for timber and paper products, high exchange-value of the euro have allowed as a whole for 2003 to achieve growth of the foreign trade turnover in the republic which volume has made $870,3 million, having increased 18.1% in comparison with 2002. Positive dynamics is observed both on export, and on import.

As a result of expansion and updating of the trading network retail commodity circulation has increased (3%). The volume of the paid services rendered to the population of the republic through all channels of realization has grown (8.4%).

The volume of investments in the fixed capital has made 9.6 billion roubles, or 92.9 % to the level of 2002 in the comparable prices. At the same time the volume of foreign investments in 2003 up to $34.7 million which exceeds the level of 2002 1.7 times.

In 2003 the tendency of delay of inflationary processes was kept: the rate of inflation for one year has made 12.9% (compared to 15.3% in 2002). Thus, growth of consumer prices was caused by outstripping rise in prices on paid services in comparison with the rise in goods' prices.

Decrease of the profit of the profitable enterprises (11% in comparison with 2002) and reduction of their share (from 54.7% up to 50.5%) in total of the enterprises of the republic is substantially related to changes in the tax laws of the Russian Federation, and also to the rise in prices on services rendered by natural monopolies.

Filling a profitable part of the republican budget occured under conditions of reduction of collections on a number of profitable sources, caused by decrease of tax loading for tax bearers, some taxes' cancellation and transfer in full in the federal budget, and decrease of tax rates. Incomes of the republican budget in the accounting year have made 5 536 million roubles, or 97% to the specified scheduled purposes. In the consolidated budget of the Republic of Karelia 8.5 billion roubles of incomes (109% to the level of 2002) has arrived, charges have made 9.4 billion roubles. Decrease of taxable base of the largest enterprises of the republic under the tax to profit, the tax to extraction of minerals, payments for using wood fund became the principal cause of default of planned targets under incomes.

The intense performance of the profitable part of the consolidated budget of the republic, certainly, has also had its effect on social sphere. In spite of the fact that for payment of wages from the beginning of year over 60% of own incomes of budgets of the republic was spent from the consolidated budget of the Republic of Karelia (the highest parameter among subjects of the Russian Federation) and financial aid from the federal budget, duly payment of wages to workers of budgetary sphere was hardly provided. Nevertheless, it was possible to avoid the delayed debts on wages to workers of budgetary sphere as of January 1, 2004.

Real available monetary incomes of the population have increased 3.3%. The average wages as a whole on branches of economy of the republic in 2003 have made 5 608.3 roubles, or have grown 21.3% to the level of 2002.

The level of officially registered unemployment within one year made 2.6-3% to economically active population.

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Created: March 25, 2004. Last updated: March 29, 2004.
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