EBRD lowers forecast for Russia’s GDP decline in 2023 to 1.5% – Kommersant

The European Bank for Reconstruction and Development (EBRD) said that at the end of 2022, the Russian economy shrank by 2.1% instead of the expected 3.5%. Against this background, the EBRD halved its forecast for 2023, to 1.5%, and left it unchanged for 2024 at 1%, the report says. report jar.

According to him, the main reason for the improvement in the indicator at the end of last year was that “high energy prices partially mitigated the effects of large-scale sanctions.” “Weak consumer demand and tight monetary policy have contained initial inflation growth,” the press release said.

However, as the EBRD notes, the decline in energy prices and the price ceiling for Russian oil set by Western countries “had a negative impact on exports and government revenues” of the Russian Federation. In addition, since the beginning of 2023, the ruble has weakened against the dollar by more than 10% “due to lower foreign exchange earnings and sales of foreign-owned enterprises, and this depreciation will contribute to inflation in the coming months,” the bank writes.

“The economy is expected to shrink again by 1.5% in 2023 under the influence of new sanctions. This, however, is an upward revision from forecasts made in February, driven by the expectation of higher oil prices and a reorientation of oil trade towards alternative directions. A return to growth, projected at 1%, is expected in 2024, although this depends on how the war with Ukraine and related economic sanctions develop,” the EBRD notes.

The European Commission on the eve raised estimates of the dynamics of the Russian economy – up to 0.9% fall in 2023. The authors of the estimates assume a decrease in consumer spending by 0.5% with an increase in government spending by 2.6% and a contraction in business capital investments by 1.2%. In 2024, Russian GDP will grow by 1.3% as the economy adapts to sanctions. Both the countries of Europe and the G7 countries intend to focus on making this adaptation more difficult and reducing these figures for the Russian Federation.

Details – in the material “Kommersant” “Fizzy Anger”.

Laura Keffer