The Ministry of Economic Development significantly improved the forecast for the Russian economy
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The Ministry of Economic Development has improved the forecast for a decline in Russia’s GDP in 2022 to 2.9%, said the head of the Ministry of Economic Development Maxim Reshetnikov during a government hour in the Federation Council. Next year, the economy will continue to decline – by 0.8%, while already in 2024-2025. GDP will grow by 2.6% per year, the minister added. At the end of August, the ministry presented a draft forecast, in which the decline in GDP in 2022 was expected at the level of 4.2%, and in 2023 – by 2.7%. In the previous version, the ministry expected the economy to grow by 3.7% in 2024 and 2.6% in 2025.
The government commission on budget projections was held on September 20, the day before ads in Russia partial mobilization. It considered the draft federal budget for 2023-2025. and forecast of socio-economic development. The authorities have planned the execution of the federal budget with a deficit for the entire coming three years, but with a gradual reduction: from 2% of GDP in 2023 to 1.4% of GDP in 2024 and 0.7% of GDP in 2025. As the Prime Minister noted Russia, Mikhail Mishustin, next year revenues are expected in the amount of about 26 trillion rubles, expenses – 29 trillion rubles, so the budget deficit should be about 3 trillion rubles. According to the prime minister, it will be covered mainly by borrowing.
“This approach will give us the opportunity not to spend the National Wealth Fund (NWF) and ensure an acceptable level of public debt,” Mishustin said. At the time of publication of the material, there was no information on the government website that the draft budget and forecast were approved by the government commission on Tuesday.
According to Reshetnikov, the forecast of socio-economic development is based on the scenario of continuing accelerated adaptation. The recession in the economy in 2023 will be mainly due to the high base effect of the first quarter of this year, as well as a decrease in net exports, the minister added. In 2024-2025 GDP will grow due to the growth of domestic demand – both consumer and investment, Reshetnikov said. The lowest point of the decline in the Russian economy, according to the head of the Ministry of Economic Development, will be passed in the fourth quarter of 2022. Earlier, Vedomosti wrote that the “accelerated adaptation” scenario implies a structural restructuring of the economy with access to GDP growth by 17% by 2030 compared to 2021 level
In addition, the Ministry of Economics lowered its forecast for inflation in Russia in 2022 to 12.4% from 13.4%. In 2023, the ministry expects prices to increase by 5.5% (estimate unchanged), in 2024 and 2025. – 4% each, Reshetnikov said. “Following a peak of 17.8% in April, we expect a decline to 12.4% by the end of the year. This is the result of the implementation of the priority action plan, which launched the processes of adapting the economy to new realities,” the minister added. According to Rosstat, annual inflation in Russia in August this year slowed down to 14.3% after 15.1% in July. For the week from September 6 to 12, Rosstat recorded deflation in the country at 0.03% after a 0.13% deflation from August 30 to September 5. This is the tenth week in a row that the country has seen price declines.
The Ministry of Economy also improved estimates of the decline in real disposable incomes of the population, follows from a fragment of the forecast presented by the press service of the ministry. According to the document, in 2022 the indicator will decrease by 2% instead of a decline of 2.8%, which was previously expected. In 2023, the incomes of the population will grow by 2% (previous estimate – an increase of 1.2%), in 2024 – by 3.1% (3.5%), in 2025 – by 2.8% ( 2%). The decline in real wages, according to the ministry, will be comparable. They will decrease in 2022 by 2%, but already in 2023 they will grow by 2.6%, in 2024 – by 2.9%, in 2025 – by 2.8%.
Unemployment at the end of the year will be at the level of up to 4.5%, Reshetnikov said at the right hour. In May-July, according to Rosstat, it amounted to a record low 3.9%. According to the forecast, overall this year unemployment will be at the level of 4.2%. Earlier, the ministry expected that in 2022 it would be 4.8%. Unemployment will rise to 4.4% in 2023 before declining to 4.3% in 2024 and 4.1% in 2025.
Course, oil, investments
Taking into account the slowdown in the global growth of the world economy, a moderate decline in oil prices is planned – from $70 per barrel. in 2023 to $65 in 2025, the minister noted. This year, according to the document, the average annual price of Urals will be at the level of $80 per barrel.
The weakening of the ruble against current values is also expected, the minister stressed. At the same time, “the real exchange rate of the ruble will be 10-15% stronger in the coming years than over the past five years,” he added. According to Reshetnikov, high risks remain for the exchange rate, associated, among other things, with uncertainty in the global economy. The fragment of the forecast distributed by the representative of the ministry does not indicate the average exchange rate of the ruble for the specified period.
Export next year will slow down the decline in real terms and will return to growth in 2024-2025, the minister noted: mainly due to non-oil and gas exports. “We also take into account the plans of the Ministry of Energy to reorient oil and gas exports to neutral countries,” Reshetnikov said.
The Ministry has significantly revised the forecast for the dynamics of investment in fixed assets. According to the new forecast, capital investments will decrease this year by 2% (instead of 10.8%), in 2023 – by 1% (instead of 4.9%). Then investment, according to the ministry, will move to growth: by 3.9% and 3.7% in 2024 and 2025. respectively.
Retail turnover, which is closely linked to consumer demand, will fall by 6.1% in 2022, and then will grow at a rate of about 3%.
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