Let’s eat our own – Newspaper Kommersant No. 149 (7350) of 08/17/2022

The macro-parameters of scenario conditions for economic development developed by the Ministry of Economy are being discussed in the government. They were first created in the logic of the new version of the budget rules, which assume stable exports at just under $500 billion a year, the agency, in line with expectations of a two-year decline in GDP in 2022-2023, expects a brief surge in unemployment in 2022, investment growth no earlier than 2024 and the stability of the ruble at the level of about 70 rubles/$. A feature of the estimates of the Ministry of Economy is lower than those of the Bank of Russia, the expectations of import volumes in the following years.

Kommersant has at its disposal the figures of the “Key parameters of scenario conditions for 2023 and for the planning period of 2024 and 2025” in the basic version – this document, which is macro-parameters for the future budget forecast as part of the budget structure for 2023-2025, was agreed this week Ministry of Finance and transferred by the Ministry of Economy to the government commission on budget projections. The departments and the government did not provide official comments on the numbers and design, Kommersant’s sources in the White House confirmed the authenticity of the document.

Recallthat last week the Bank of Russia published its versions of the macro forecast for budgetary purposes as part of the report on monetary policy.

In the current version, the forecast of the Ministry of Economy has a slightly different logic from the forecast of the Central Bank.

Thus, the calculations of the Ministry of Economy, obviously, have already been based on the logic of the new version of the budget rules: the figures that Kommersant got acquainted with are not accompanied by a forecast estimate of the price of oil, the largest export resource of the Russian Federation, which has been supplied to foreign markets since September as a result of sanctions imposed by the EU due to the military operation of the Russian Federation in Ukraine will be limited along with gas supplies. At the same time, the department expects a de facto stable income from exports to the federal budget due to the stability of its monetary volumes – $505.4 billion in 2023, $497.7 billion in 2024 and $494.1 billion in 2025. Exports in 2022 are projected at $585.3 billion, slightly below the Central Bank’s expectations – while the Bank of Russia, focusing in its forecast on a decline in oil prices from $80 per barrel in 2022 to $55 in 2025, expects the current account to collapse in three years . The Ministry of Economy, in turn, expects that the balance will remain strongly active over the entire forecast horizon: after a record current account surplus in 2022 ($239.8 billion, similar to the Central Bank’s estimates), it, according to the baseline scenario of the department, will decrease to $114.9 billion in 2023, $95.5 billion in 2024 and $82.4 billion in 2025.

It should follow from this that the budget structure, as presented by the Ministry of Economy, will not stimulate excessive growth, including the outpacing growth of imports – the figures of Maxim Reshetnikov’s department provide for very weak growth in imports (from $299 billion in 2022 to $340 billion in 2025, the Central Bank expects it to be $316 billion in 2022 and $361 billion in 2025 – we note that in the calculations of the Bank of Russia, taking into account dollar inflation, imports in 2025 are slightly, but higher than the “pre-war” level of 2021, in the calculations of the Ministry of Economy – not higher) and for the entire period, thus, a strong trading surplus.

It is impossible to accurately calculate the oil prices that are included in the forecast; nevertheless, the construction is very similar to fixing oil prices in it at a level of about $65 per barrel, or rather, the implementation of the idea long proclaimed by the head of the Ministry of Finance Anton Siluanov to build a budget not on the concept of “cut-off price”. » oil, but on limiting federal spending paid for by commodity export revenues to a certain amount, with a “transition period” of 2023-2024. The figures of the Ministry of Economy better than the forecast of the Central Bank fit into this concept – it is probably considered approved in principle and, possibly, will be announced quite soon.

The dynamics of GDP in the description of the Ministry of Economy looks like this: the decline in 2022 is 4%, the decline in 2023 is 2.7%, the growth in 2024 is 3.7% (significantly higher than the forecast of the Central Bank), the growth in 2025 is 2.6% (the Central Bank – 2.5%).

It should be noted that, taking into account the estimated GDP deflators by the Ministry of Economy, the nominal growth of the gross domestic product in 2023, the most difficult period in all respects (for example, from the forecast of the Ministry of Economy it follows that the peak of the quarterly decline in GDP will occur in the first half of 2023, as well as the peak of a small surge in unemployment – to an annual average of 5.2% according to the ILO methodology – with its subsequent reduction below the level of 2021 – 4.8% – to 4.6% and 4.5% in 2024-2025), will be practically zero. However, the upcoming autumn-winter is expected to be more difficult for the population – a decline in real wages (mainly due to inflation that has not yet extinguished by this time) by 2.9% is expected in 2022 (in 2023 – an increase of 2.6%, in 2024 – 3.1%, in 2025 – 2.5%), the dynamics of real disposable income will be slightly weaker. The peak of their growth, according to the figures of the Ministry of Economy, will be in 2024 (3.5%) – at the same time, retail turnover in 2024 should grow by 5.6% (in 2022 it is expected to fall by 6.6% with a subsequent increase of 2%) . The Ministry of Economy expects the dynamics of services to be slightly weaker than the dynamics of retail. The agency expects an investment downturn in the Russian Federation for a two-year period: a decline of 10.8% in 2022 and 4.9% in 2023, an increase of 7% in 2024 and 3.8% in 2025.

Inflation in the scenario of the Ministry of Economy is similar to the corridor of estimates of the Central Bank. The dynamics of the average annual dollar exchange rate is a gradual weakening from 68 rubles/$ this year (that is, with a significant devaluation of the ruble until the end of 2022) to 74.8 rubles/$ in 2025. The scenario conditions of the Ministry of Economy cannot give an answer to the question of what operations support such a rate with such a strong expected trade balance surplus — at the same time, the ministry’s estimates of imports are significant, by 5–10% per year, lower than the estimates of the Bank of Russia.

Dmitry Butrin