According to a top government official, Russia’s economy will have a less severe decline than anticipated over the following years and may begin to expand on a quarterly basis as early as the end of 2022.
According to Russian news outlets, Economy Minister Maxim Reshetnikov stated that the administration was now predicting a 2.9% decrease in Russia’s GDP for 2022, an improvement above its August prognosis of a 4.2% yearly decline. According to Reshetnikov, the Russian economy is anticipated to resume quarterly growth in late 2022 or 2023. However, due to the “high base effect” of Russia’s robust growth of 3.5% in the first quarter of this year, the economy would nonetheless register a tiny decrease of 0.9% for the entire year of 2023.
The updated projections represent a major increase over the economy ministry’s previous prognosis, which called for a 2.7% decline in GDP in 2023. Russian officials have praised the economy’s performance in recent months, claiming that it is enduring the Western sanctions imposed as a result of Moscow’s invasion of Ukraine considerably better than anticipated.
What Do Economists See for the Russian Economy?
Some experts cast doubt on Russian officials’ recently upbeat assessments of the economy’s medium-term prospects. They are citing the sanctions’ gradual impacts and rising prices as a result of policies like the European Union’s energy embargo and limitations on the sale of Western technology to Russia.
According to Reshetnikov, the economics ministry on Tuesday also revised its prediction for 2024 downward because it anticipated softer reductions in 2022 and 2023, followed by a more gradual recovery. Instead of 3.7% growth in 2024, it now anticipates 2.6% growth.
Reshetnikov predicted that generally, Russia’s economic development will be greater than initially anticipated during the next years. After 2024, the economy, according to him, would post GDP growth of more than 3% per year, stabilizing by 2026 at the nation’s long-term growth rate of about 3% per year. The ministry issued a warning that the economy might contract by more than 12% this year in April, following the deployment of tens of thousands of troops into Ukraine in what Moscow terms a special military operation.