Entrepreneur confidence in the mining and quarrying sector showed better results during 2010 and 2011 than did entrepreneur confidence in the manufacturing sector. Mining and quarrying is the main productive sector of the Russian economy, and high oil and gas prices have encouraged rapid development in this sector over the past years. Entrepreneur confidence in mining and quarrying stayed positive most of the time during 2010 and 2011. In contrast, entrepreneur confidence in manufacturing has remained negative since October 2008, with its biggest slump in 2009 followed by gradual improvement.

The industrial production index gained 3.3% in manufacturing and rose 1.8% in mining and quarrying in December 2011 compared to the same month of the previous year. Both the manufacturing IPI and the mining and quarrying IPI showed upbeat movement during 2010 and 2011, reflecting the recovery from the slump in 2009. The manufacturing IPI both fell harder in 2009 and rebounded stronger in 2010 than the mining and quarrying IPI. After a jump in 2010, attributed to post-crisis recovery, both sectors returned to normal IPI growth rates towards the end of 2011.

The current data reflect gradual stabilization in the Russian economy with some seasonal declining effects. Entrepreneur confidence remains low—but stable. The industrial production index remains positive, however, without significant growth. The political situation in Russia is polarized in the run-up to the presidential elections that will be held in March 2012. The new president of Russia will face the challenges of slow growth in industrial production, shaken economic confidence, negative expectations, income inequality, and a budget dependent on oil and gas revenues.

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