RAS analysts lower expectations for GDP growth
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Analysts from the Institute of National Economic Forecasting (INP) of the Russian Academy of Sciences have published a fresh short-term analysis of GDP dynamics based on data available as of mid-February 2024, where they record “contradictory trends in economic dynamics.” On the one hand, after a decrease in the estimated monthly value of GDP in November 2023 (by 0.4% seasonally adjusted for the month), “its growth resumed” (0.2% in December to November 2023, respectively), they note (see. schedule). On the other hand, the estimate of GDP growth in the fourth quarter of 2023 decreased by 0.5 percentage points, to 4.8% a year, including due to Rosstat’s revision of retrospective data for 2022–2023, mainly in industry and construction (see . “Kommersant” dated February 7, 2024). Similar trends are recorded by analysts at the VEB Institute for Research and Expertise: in the fourth quarter of 2023, GDP growth slowed sharply: the GDP index they measure, seasonally excluded, increased by 0.1% quarter-on-quarter after growing by 0.8–1.9% in the previous five quarters.
The Institute of Economic Forecasting of the Russian Academy of Sciences notes that industry did not grow (month by month, taking into account seasonality) for the last seven months of 2023. “This means the actual achievement of the limit for increasing industrial production volumes in a number of industries that are in demand in the current conditions using existing production capacities,” conclude the authors of the estimates. They also expect a slowdown in construction growth. All this, “together with a temporary decline in consumer activity against the backdrop of the growing attractiveness of savings,” are the main factors for adjusting the short-term INP forecast for the Russian Federation’s GDP growth rate at the end of 2024 (to an increase of 1.2% compared to 1.6% in the previous January version of the forecast Institute of Economic Forecasting RAS) (see “Kommersant” dated February 5, 2024).
The forecast of the Institute for Economic Forecasting of the Russian Academy of Sciences for economic growth in 2024 traditionally remains noticeably below the consensus, including in terms of the direction of revisions. The macroeconomic consensus forecasts of the Central Bank and FocusEconomics for 2024, published on February 7, were, on the contrary, slightly improved (in terms of consumption and investment) and assume growth of the Russian economy by 1.6%. The consensus forecast of the HSE Development Institute, updated based on survey data from February 8–19, 2024, also assumes economic growth of 1.5% in 2024. Meanwhile, the cooling of private consumption expected by the Institute of Economic Forecasting RAS has not yet been justified (see, among other things, “Kommersant” dated February 26, 2024).
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