RANEPA scientists predict Russian economic growth even with increased sanctions

Teachers at the Institute of Applied Economic Research of RANEPA identified two scenarios for economic development from 2024 to 2026, namely: basic and conservative. Both options do not differ in the likely set of sanctions. However, there is a difference in the speed at which restrictions appear. About it it says in the article “High risks and weak economic growth rates: macro forecast for Russia in the medium term” of the scientific journal “Economic Issues”.

Under the conservative scenario, GDP growth will slow sharply from 3.6% in 2023 to 0.3% in 2024. However, the figure will then return to the growth trajectory – 1.5% in 2025 and 1.4% in 2026. In this case, inflation will accelerate for some time and reach 8% by the end of the year. How reported Central Bank, In January 2024, inflation is 7.44%), but in 2025 it will drop to 6%, and in 2026 it will return to 4%. If these risks materialize, real income will fall by 0.6%, but in the next two years they will grow by 0.7 and 1%, respectively.

If the base scenario is implemented, economists predict a gradual acceleration of GDP growth from 1.5% in 2024 to 1.6% in 2025 and 2.2% in 2026, a return of inflation to the target by the end of next year and a moderate increase in real incomes of the population in within 2% per year.

According to experts, the experience of the sanctions shock over the past two years shows that the state of the Russian economy turned out to be better than initial forecasts. The first estimates showed that in 2022 GDP shrink by 8–10% (in the spring and summer, such forecasts were given by the Ministry of Economy, the Central Bank and the IMF). Ultimately, the economy contracted by just 1.2%. This gives reason to believe that the negative effect of subsequent sanctions will also be lower than expected.

The second premise of the RANEPA experts’ forecast is based on the fact that the latest 13th package of sanctions against Russia has so far does not create additional difficulties for the domestic economy. On this basis, experts conclude that the most serious measures have already been introduced: restrictions on exports and imports, pressure on the financial system and freezing of assets abroad. Thirdly, most sanctions scenarios are worked out by the Russian authorities, which minimizes the effect of surprise.

The United States and the European Union adopted new packages of anti-Russian sanctions on February 23. The US Treasury included 57 individuals and 485 legal entities, as well as 12 ships, into the sanctions lists. The restrictions also affected companies from Kyrgyzstan, China, the UAE, Serbia, Turkey, Germany and other countries. The 13th package of EU sanctions included 106 individuals and 88 legal entities from Russia, as well as companies from India, Kazakhstan, China, Serbia, Thailand, Turkey, and Sri Lanka. Canada and Australia also introduced new sanctions.

Read more in the Kommersant article. “Sanctions have a beginning, but sanctions have no end”.

Nikolay Antipin