Gross value added in the real economy of Russia’s northern regions: Dynamics and structure

Abstract

This article explores the trends and factors influencing the dynamics of gross value added (GVA) in the real economy of Russia’s northern regions during the special military operation. The relevance of this analysis lies in the critical role of the real sector in driving economic recovery and growth in these regions. The scientific novelty of the study lies in its comprehensive analysis of the structure and growth rates of GVA in the real sector of the northern regions, marking the first such analysis. This approach improves the understanding of the real sector’s role within the broader economy. The study clarifies the concept and structure of the real sector, demonstrating that the development of the mining industry represents a competitive advantage for the northern territories. The research reveals that the growth rates of GVA in the real sector during the Special Military Operation are largely driven by significant expansions in construction, transportation, storage, and manufacturing. It also shows that the sharp decline in mining GVA in the northern regions amid sanctions is linked to the need to establish new export channels, while the contraction in manufacturing GVA is attributed to logistical challenges and the inability to quickly shift to the domestic market. The rapid growth in construction is explained by increased housing and infrastructure development, the financing of national projects, and the launch of new mining ventures. Practical recommendations are provided to support sustainable growth in GVA within the real sector. These recommendations are intended to inform the development of socio-economic policies for the northern regions, focusing on improving mechanisms for achieving dynamic economic growth and improving the quality of life for local populations. Future research will further investigate the prospects for economic growth in the northern regions, particularly their potential to return to a path of sustainable development amidst sanctions and disruptions to production chains. Additionally, the study will explore how the high concentration of industries in the real sector and shifts in the industry structure of GVA have impacted key production factors.

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