A year of growth is not to be seen – Newspaper Kommersant No. 48 (7493) of 03/22/2023

According to the updated macro forecast for the Russian Federation for 2023-2025, published today by the ACRA rating agency, the Russian Federation, most likely, will not reach positive annual economic growth rates in 2023, the decline will be 1-1.5% with a transition to growth by 0.8 -1.8% in 2024 and 0.4-1.6% in 2025. Forecast (see “Kommersant” dated December 1, 2022) described the same trends more dynamically – ACRA expected a 4% decline in GDP in 2022 (actual – 2.1%), its decline by 2.8% in 2023 with a transition to weak growth at the level of 1.3% in 2024 -m. Estimates were softened by the improvement in global growth forecasts (from 1.1% to 1.3-1.8% in 2023, including due to higher growth rates of China’s GDP, which grew in 2022 by 3%, and not by 2.1%, as analysts expected at the end of the year), as well as better-than-expected performance of Russian foreign trade and the stimulating effect of increased budget spending.

Justifying the differences from the official views on the future of the Russian economy (the forecast of the Ministry of Economy now assumes its decline by 0.8% in 2023, by April it will be revised, probably towards improvement), ACRA notes a set of factors as statistical (high base in the first quarter of 2022 of the year, which will ensure a strong quarterly decline in the first quarter of 2023; see the chart), as well as meaningful ones – such as a reduction in production and processing in the oil and gas sector (a planned decrease by 5% from March 2023), estimated by ACRA analysts at minus 0.2 % of GDP. Also, the impact will have (if implemented) a reduction in budget spending (by 5% in nominal and 10% in real terms) after their growth by 12% in 2022, however, it will be mitigated by the fact that the peak of government spending occurred at the end of 2022 and de facto reached the recipients already in 2023, so the contribution of the state to GDP growth in ACRA is expected to be slightly positive, but incomparable with the effect of 2022. In turn, the agency expects a positive contribution to economic growth from stimulating investment, infrastructure and industrial construction, and from improving consumer demand (due to an increase in real incomes of the population by 1.1-1.9% due to record low unemployment) , however, with the proviso that the industry will continue to adapt to the new reality and satisfy only part of it.

Oleg Sapozhkov