Economist Nikolaev without optimism estimated the fall in GDP “only” by 2.1%

Russia’s GDP in 2022 fell less than expected: by 2.1% compared to 2021. In the red – ecology, trade, manufacturing. In the black – agriculture and the food industry, construction, the operation of hotels and catering establishments. MK spoke with an expert about how these figures should be understood.

On the eve of the announcement of the President’s Address to the Federal Assembly, Rosstat published the final data on Russia’s GDP last year. It follows from them that the country’s gross domestic product (GDP) in 2022 decreased by 2.1% compared to 2021. A month earlier, Vladimir Putin, referring to preliminary data, spoke of a fall of 2.5%. But in 2021, we recall, the Russian economy grew by 5.6% compared to the 2020 quarantine year – this was also due to the gradual lifting of anti-coronavirus restrictions.

If you look at the industries, the situation at the end of 2022 looks ambiguous. There are those where the fall is significant: “wholesale and retail trade, repair of vehicles and motorcycles” – minus 12.7% per year.

“Water supply, sanitation, waste collection and disposal, pollution elimination activities” – minus 6.8% (in 2021, this section showed an increase of more than 15 percent). “Health and social services” also sank: minus 3.2% in 2022 after rising by 14.9% a year earlier.

But everything looks good in agriculture and forestry (plus 6.4%), in construction (plus 5%), in public administration, including military security and social security (plus 4.1%). Financial and insurance activities added 2.8%, no matter what. “The activity of hotels and catering enterprises” showed an increase of 4.3%.

Net exports (that is, exports minus imports) increased by 12.8% over the year: this is apparently due primarily to the fact that due to rising prices and increased supplies of oil and gas, the value of exported abroad exceeded the value of imported into the country goods. By the way, there are no detailed statistics on exports and imports in the public domain: they are no longer published.

“MK” asked to evaluate the data of Rosstat on GDP, Doctor of Economic Sciences Igor NIKOLAEV.

– How important is this indicator – gross domestic product – for assessing the situation in the economy?

– This is the main macroeconomic indicator: everything that is produced is new or added value. There are many complaints about this indicator, but so far they have not been able to come up with anything better, and all over the world what is happening in the economy, whether it is growing or falling, is judged primarily by the dynamics of GDP. In different industries, the situation may be different: the overall indicator is in the plus, and some industries are in the red, and vice versa – the overall indicator is in the red, and some industries are in the black. This is what we see: the general indicator is minus 2.1%, and agriculture, for example, is plus 6.4% …

But overall, it’s still going down. Of course, minus 2.1% is better than the forecasts made last spring. The Bank of Russia, let me remind you, then spoke about a possible fall in GDP by 8-10 percent by the end of the year …

– Just minus 2.1% – is this a reason for optimism?

– You can judge in different ways. Now they mainly judge by comparing the current figures with what was expected immediately after the imposition of sanctions. But it is important to remember with what forecast we entered 2022: then we expected the economy to grow by 3%. Now, instead of growth by 3%, we have minus 2.1%, that is, only minus five percentage points … This is a serious shortfall compared to what could be.

– Rosstat, speaking about the structure of GDP expenditures, recorded a drop in the share of GDP used for household final consumption: from 49.2% in 2021 to 46.9% in 2022. Can these numbers be trusted?

– Here the figures can be more or less trusted, because we are talking about household consumption on a national scale, on the scale of the entire economy.

– Does the forecast for GDP for 2023, on the basis of which the country’s budget was calculated, look realistic?

The budget for 2023 was adopted on the basis of a forecast that assumes that there will be a fall of 0.8% of GDP. But there have already been statements by the Ministry of Economic Development about revising this forecast and, apparently, about improving estimates. A very interesting statement was made by IMF experts, who believe that in 2023 the Russian economy will grow by about 2%. This is an amazing forecast, I don’t understand on the basis of what data they received such figures, because the heaviest sanctions against Russia came into force in December last year – February this year … Sanctions are a serious economic stress. Therefore, in terms of dynamics, 2023 will not be easier than 2022, I think.