March 2014 | Macro economic review
08 March 2014

The frenzied seasonal agricultural activities – purchases of plants, seeds, fertilizers, investment in food processing, as well as the upcoming elections, invigorated real economic activity in March 2014. According to the GeoStat primary estimates, in this month the y-o-y real economic growth reached 8.3%. As a result, the primary growth rate for the first quarter of 2014 increased to 7.4 %.

As encouraging as the figures look, the important question is whether growth is driven by increased business activity or an increase in private household consumption? Unfortunately, at this point, there is no solid evidence on which one could base an answer to this question. The data on the breakdown of GDP by categories on a monthly basis is simply not available. We have reasons to believe, however, that March growth is driven at least in part by higher consumer spending, and in that sense may be short-lived. The business activity has picked up as well, but the relative importance of these two growth components in GDP is yet to be ascertained.