General Results.

In 2007 economic situation in the Commonwealth countries was favourable as a whole, there were high growth rates as before. In the majority of the countries the growth rates of the main macroeconomic indicators were close to indicators of last year or exceeded them. On average for the CIS countries gross domestic product (GDP) increased by 9% (in 2006 – by 8%), industrial output – by 7% (by 5%), investment in fixed capital – by 20% (by 15%), cargo transportation – by 5% (by 7%), retail turnover – by 16% (by 15%).

The greatest growth of GDP remained in Azerbaijan and Armenia. At the same time the tendency to convergence of the rates of economic growth of the Commonwealth countries was observed what manifested in decrease of gap between maximum and minimum growth rates of GDP.

Growth of GDP was caused to a considerable extent by the dynamics of industrial production. In some countries high rates were observed not only in mining industry, but in such branches of manufacturing industry as woodworking, chemical production, foodstuffs production. GDP growth outstripped the growth of the number of employed in economy indicating the growth of labour productivity.

High growth rates of economic development ensured the speeding-up of the growth of nominal wage in comparison with inflation what promoted the increase of wage, real disposable incomes and current saving of population. Consumer market as a whole developed rather stably however in some countries more than its half is ensured by imports.

Practically in all countries of the Commonwealth economic growth resulted in inflation; in 2007 in some countries it was the highest one for the period from 2000. By the end of the year prices for socially important foodstuffs increased noticeably, what is caused by growth of world prices for foodstuffs, and in selected countries – by reduction of its imports and insufficient volume of domestic production. Despite of market saturation growth of prices for non-food goods continued. In some countries the growth of prices and tariffs for market services rendered to population speeded up, especially for housing and communal services. Growth of prices for goods and services of everyday life influenced greatly the living standard of households with low level of income.

In all countries of the Commonwealth total volume of external trade turnover increased; at the same time imports of goods increased by higher rates than exports. During 2007 the growth of mutual trade in goods on average for the Commonwealth countries outstripped the growth of trade with other countries of the world, mainly, at the expense of exports dynamics. As a result the share of mutual trade in export and import transactions of the CIS countries somewhat increased, however over than three forth of these transactions values fall on trade with other countries of the world.

Further activization of investment activities was observed in some countries of the Commonwealth. Growth rates of investments in fixed capital continued to outstrip the rates of GDP increase. Volumes of housing construction increased in all countries.

Increase of volumes and terms of bank lending favoured the growth of investment; in the majority of the Commonwealth countries long-term lending increased by outstripped rates in comparison with short-term lending. Receipt of foreign investments was of great importance for investment activities recovery of some countries.

In 2007 the situation on currency markets remained rather stable and reflected the conjuncture of the majority of the CIS countries. Strengthening of the majority of national currencies against US dollar continued and was accompanied by position of euro and Russian rouble intensification against national currencies.

Stabilization of financial situation allowed to achieve considerable reduction of arrears of wages in some countries. At the same time in some countries it remained on rather high level (mainly in industry and agrarian sector).