GDP cleared of decorations – Newspaper Kommersant No. 61 (7506) of 04/10/2023

The GDP statistics updated by Rosstat do not record a confident economic recovery in the second half of the year: there were no sustainable growth factors six months ago. In 2023, despite the hopes of the economic authorities for a quick recovery in investment and consumer activity, the alternatives to the continuation of the recession are uncertain – they are based on data from January-April, the next months will provide a firmer basis for assessing the picture of GDP recovery.

Second estimate of GDP for the past year, published Rosstat, left unchanged its contraction of 2.1%. However, statisticians revised not only the nominal volume of the indicator – by 2 trillion rubles. (up to 153.4 trillion rubles) due to an increase in the deflator from 14.3% to 15.8%, but also intra-annual dynamics in the first-third quarters of 2022 – from 3.5% to 3%, from 4.1 % to 4.5% and from 3.7% to 3.5%, respectively.

The seasonally adjusted dynamics of quarterly GDP, presented by Rosstat, fixes a collapse in consumer demand and a sharp reduction in inventories, which led to a sharp drop in the economy by 4.6% in the second quarter. After that, already in the third quarter, the recovery of inventories and gross fixed capital formation led to an economic growth of 0.5%, which was maintained in the fourth quarter thanks to support from the public sector and the same gross capital formation. “This is not the V-shaped recovery that has been seen since covid. We are talking about very smooth growth, and the main reason for this is external demand, which came under very serious pressure in the second half of 2022,” analysts say Telegram channel MMI.

According to the results of the year, in the structure of value added, the share of households increased to a maximum since 2016 – 14.2%, and non-financial companies – to a maximum since 2020 – 66.3% (the share of the oil and gas sector increased to 18.1% – a maximum since 2019 , and the share of products of high-tech and knowledge-intensive industries decreased to 22.6% from 23.9% in 2021).

At the same time, the decrease in household spending over the year amounted to only 1.4%, which, according to MMI analysts, “does not radically beat” the dynamics of the total volume of private demand (retail, services, public catering – minus 4.1%).

On the production side, compared to the crisis of 2015, the financial sector turned out to be more stable (thanks to the clearing of weak banks and preferential mortgages), construction and the public sector. The wholesale trade (here the key problematic sub-sectors are natural gas trading, business services and car dealers) survived the recession in 2022 much worse than in 2015, notes Alexander Isakov of Bloomberg Economics.

The Ministry of Economy expects a fairly quick recovery of the economy, which will be replaced by growth due to domestic consumption and investment already this year (an updated forecast of the department will appear in April). The data for January-February allow the agency to expect this. The forecast of the Bank of Russia dated February 10 is from plus to minus 1% in 2023 and growth from 0.5% to 2.5% in 2024. The World Bank, we recall, revised its forecast for GDP dynamics in 2023, now expecting a decline of only 0.2% instead of a decline of 3.3%, which it expected in January, and worsened its growth forecast for 2024 to 1.2% from 1.6%. A similar direction of revisions is found in the latest FocusEconomics consensus forecast: from 2.2% to 1.8%, the recession forecast for the current year has been improved, and in 2024 the economic growth forecast has been worsened from 1.1% to 1%. At the same time, the spread of forecasts both in the first (from minus 7.1% to 1%) and in the second (from minus 6% to 3.1%) cases remains extremely high.

Artem Chugunov