Why the Ministry of Economy revised the prospects for the Russian economy

The Ministry of Economic Development has raised estimates of the growth of the Russian economy for 2023 and lowered it for 2024, follows from the scenario conditions for the development of the economy for the next three years. The ministry now expects GDP to increase by 1.2% this year (compared to a 0.8% decline expected in the September version of the forecast) and by 2% next (compared to 2.6%). The document is published on the website of the ministry. The forecast has been submitted to the government, it is recommended to use it for preparing budget projections, a spokesman for the ministry said.

The main contribution to economic growth will be made by the recovery of consumer demand after its decline in 2022, said Minister of Economic Development Maxim Reshetnikov at a joint board meeting of the Ministry of Economic Development and the Ministry of Finance. This will be facilitated, among other things, by the growth in real incomes of the population in 2023 (the estimate has been increased from 1.6 to 3.4%). Demand will recover both as the population’s propensity to save normalizes and as consumer lending grows, he added. In 2024 and 2025 real incomes will grow by 2.6%, in 2026 – by 2.7%, follows from the forecast. First of all, the increase in the incomes of the population is ensured by the growth of wages (the estimate has been increased from 2.6 to 5.4%), the minister noted. Real wages will increase by 2.8% in 2024–2025, by 2.5% in 2026, follows from the forecast.