In 1992 the economic situation in the Russian Federation continued to be very difficult, owing to large macroeconomic imbalances and to the unavoidable difficulties arising in the initial stages of the transition to a market economy. Nevertheless, significant progress was achieved in implementing structural adjustment policies in some areas.
Real GDP and industrial production are estimated to have dropped by 19 percent in 1992. Oil extraction fell by 15 percent, while the output of natural gas remained unchanged; agricultural output fell by 8 percent. The fall in output reflected a number of factors, including the decline in demand associated with the drop in real incomes following the liberalization of prices in January 1992; the short-run effects of the economic transformation; the interruption of traditional trade links with the countries of the former Council for Mutual Economic Assistance (CMEA) and the states of the former Soviet Union; and cutbacks in investment and military spending.
Monthly inflation rates began to decline after the jump in prices associated with price liberalization in January 1992. However, this trend was reversed around midyear and between October 1992 and March 1993, monthly inflation rates were between 20 percent and 30 percent. Between the end of 1991 and end of 1992, consumer prices increased by over 2,300 percent. The acceleration of inflation after midyear reflected a substantial loosening of financial policies. Real wages dropped sharply in connection with the liberalization of prices, but recovered somewhat in the course of the year and at year-end stood at 90 percent of their 1987 level. Registered unemployment remained low.
Words you may need:
macroeconomic imbalancesмакроэкономические диспропорции
are estimated to have droppedпо предварительным подсчетам, сократились
oil extractionдобыча нефти
short-runadj краткосрочный
cutbackn снижение, уменьшение, сокращение
spendingn расходы
reverse v поворачиваться в противоположном направлении
accelerationn ускорение
loosenv ослаблять
recoverv (зд.) восстанавливаться