Russian Economy General News: #13

Belousov said that the dynamics of Russia's GDP in 2023 will be near zero


The dynamics of Russia's GDP in 2023 will be near zero, and no fatal problems in the economy are expected. First Deputy Prime Minister Andrey Belousov spoke about this in an interview with the Russia 24 TV channel .

According to him, the coming year for the Russian economy will be much easier than 2022, and the government of the Russian Federation does not see any fatal problems .

Belousov added that Russia will not be able to show GDP growth of 3 percent, as expected, in 2023.

“I think it will be around zero. We now have a forecast of about minus 1 percent, a little less,” he said.

According to the forecast of the Ministry of Economic Development, Russia's GDP in 2023 will decrease by 0.8 percent, in 2024-2025 it is expected to grow by 2.6 percent annually. 

The Central Bank of the Russian Federation in October predicted a decline in GDP in 2023 by 1-4 percent. According to Kirill Tremasov, director of the Central Bank’s monetary policy department, in February the regulator will narrow this forecast, most likely, the economy will decline next year, but this trend is expected to reverse in the middle or third quarter of 2023 . The forecast of the Central Bank for 2024-2025 assumes an increase of 1.5-2 percent. ■

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Russian financial voodoo. 
The economy will "shrink" despite massive investment in infrastructure, huge program for civilian aircraft production, massive increase of
military production and a gigantic construction program of buildings and roads in Mariupol and the whole of the liberated areas.
Makes you wonder what the russian government is also hiding from the official GDP count.

Loss of large amounts of import and export, transit of goods, retail trade, pull-out of companies and shuttering of operations, all sorts of banking disruptions, supply chain problems in production, cancelled orders, loss of markets and payment options for businesses orientated to Western markets or reliant on Western technologies.. really it's a miracle that the economy has held up as well as it has, and managed to recover most of the lost ground the same year

The GDP drop for 2022 is consistent with financial shenanigans and not actual physical economic contraction. So any "zero"
GDP growth in 2023 will be yet more financial BS since there is a clear expansion of physical production that is already starting
to occur in the MIC and most of the rest of the industrial sector.

Russia is not Germany and Japan and its automobile sector is not the pivot of its industrial activity. That contraction you talk
about also involves contraction of money flow to western operators of the production.

Import substitution is a huge factor and somehow it is being treated like it was negligible. This is clearly not credible and
speaks to a deep ignorance or deliberate misinformation about the actual economic situation.

BTW, where is all the mass unemployment from that car production drop? Or from the rest of the claimed industrial activity
decline. Clearly there is none. In fact, hiring in the civil aircraft industry is expanding by the thousands. This is happening
now and not 2 years from now.

There is no miracle. Russia's economy is in the top rank of autarchies. The USA was always claimed to be self-supporting but now it
is also import dependent and de-industrialized. The fluff over Russian banks is a joke. They have established a critical mass of domestic
lending to be able to eliminate dependence on foreign borrowing and banking transaction infrastructure to replace SWIFT and various
credit card operations has been deployed after 2014. It is only NATzO hubris-filled windbags that did not pay enough attention to
these show stopper details. That is why they launched their financial "nukes" and got explosions of confetti.

The problem is that NATzO retardation percolates into the minds of people around the world, including Russia, as substance. Many
assume that NATzO's claims and actions must be based on substance. No, they are delusional BS and people who think this way
are idiots.

North Korea is at the top of autarchies

Russia is nowhere close to how self-sufficient the USSR was especially with the COMECON bloc economies included. The EU was at the start of 2022 still Russia's largest collective trading partner. Not China. Not India. Not anyone like that.

Russia imports and exports massive amounts of commodities, goods and services and although the domestic market is the main driver of its economy; everything has its knock-on effect. Most financial operations, travel, tourism, investments, goods transit, shipping, international trade, contracts with Western customers/suppliers/partners and various forms of services were disrupted. Some have yet to recover. The American IT conglomerate I worked for a few years back closed shop and relocated to Montenegro this year. Took half its staff with it. That's well over 100 highly-qualified IT specialists, and the salaries they were making were in the top tier for this city. It's a miracle Russia has been able to compensate as quickly as it has.

North Korea is at the top of autarchies

Are you kidding? The country relies on hand-outs of food and oil from China and Russia and the salaries of people working abroad (mainly China and Russia).

It's a miracle Russia has been able to compensate as quickly as it has

[size=32]VVP more or less foresaw the Russian present-day economic scenario a few years ahead and proceeded accordingly.[/size]

Thing is he himself was surprised at how successfully this was managed. As was Naibullina, and everybody else

If it had been known ahead of time, then we wouldn't have needed to keep a spare $600 billion in the piggy bank and some of that money could have been invested. Still, better safe then sorry.

Rosstat increased the estimate of Russia's GDP growth in 2021 from 4.7% to 5.6%

The estimation refinement is based on the annual results of federal statistical observations and reporting data from the Federal Treasury.
Rosstat increased the estimate of Russia's GDP growth in 2021 from 4.7% to 5.6%

Rosstat raised its estimate of Russia's GDP growth in 2021 from 4.7% to 5.6%. This is evidenced by the data of the statistical service.

As noted in Rosstat, the refinement of the estimate is based on the annual results of federal statistical observations and data from the annual budget reporting of the Federal Treasury.

According to the statistical service, GDP for 2021 amounted to 135 trillion 295 billion rubles, the physical volume index relative to 2020 is 105.6%, the deflator index is 119.0%. In 2020, the annual GDP amounted to 107 trillion 658.2 billion rubles, the volume index relative to 2019 is 97.3%, the deflator index is 100.9%.

Earlier, the Ministry of Economic Development said that Russia's GDP in annual terms in November slowed to minus 4% after 4.5% a month earlier, the contraction of the economy over the past 11 months is estimated at minus 2.1%. The ministry also noted that in November compared to October, the economy grew seasonally by 0.2%, as well as a month earlier. ■

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Russia will close 2022 with a record surplus in its foreign trade despite sanctions, 12.30.2022.

MOSCOW (Sputnik) - Russia's foreign trade will close 2022 with a record surplus despite complications with hydrocarbon exports in December, deputy director of the Federal Customs Service Ruslan Davidov said.

"In terms of the value of trade exchange, we have already exceeded the results of 2021. Thanks to the volume of exports, we will have a record positive balance this year. The difficulties with the December hydrocarbons will not change the situation," Davidov told Sputnik.

Russia closed 2021 with a commercial exchange of 789 billion dollars, with a balance in its favor of 190.1 billion.

Since December 5, the European Union (EU) has stopped importing oil from Russia transported by sea. The G7 countries, Australia and the EU implemented a $60 cap on the price of a barrel of crude oil from Russia.

In response, Russia has banned oil exports to countries that adopt the price cap since February 1, 2023.

Davydov indicated that Customs has registered a decrease in oil exports these weeks.

Yandex Translate from Spanish

https://sputniknews.lat/20221230/rusia-cerrara-2022-con-un-superavit-record-en-su-comercio-exterior-a-pesar-de-las-sanciones-1134161165.html

Officially, the Russian economy is only 2% of the world (if we count by the level of GDP, which shows about nothing). If we consider it more objectively, the share of the Russian economy grows to about 8%. For comparison, the share of the US economy is about 14-18 percent of the world. Thus, the real size of the Russian economy is approximately equivalent to 50% of the US economy. The next time someone says that "the Russian economy is less than %_randomStateName" - smear the bastard with this fact.

Nuclear power plants in Russia in 2022 reached a new record for total electricity generation – it is expected to reach almost 223.3 billion kWh, which is 900 million kWh more than last year. It is also expected that the installed capacity utilization factor (CIUM) of Russian nuclear power plants will be a record – more than 86%.

https://ria.ru/20221223/energiya-1840753750.html

NOTE: found the following funny so posted it.   Wonder how the citizens in the west would respond to such a law   As an FYI, the FSSP is the Federal Bailiff Service of the Russian Justice system. Who know the Russians were so hard ass re debt collection?  



FSSP: eight million Russians cannot leave the country due to debts

The number of Russians who are restricted from leaving the country due to debts, as of December 1, 2022, amounted to eight million. This was reported by the press service of the FSSP of the Russian Federation.

   “Currently, within the framework of eight million enforcement proceedings, there are rulings on the temporary restriction of debtors in the right to leave the Russian Federation,” the report says.

It is clarified that in the same period of 2021, such restrictions were in effect in relation to 4.6 million debtors.

The FSSP reminded that you can find out about your debts on the official website of the department, or on the portal of the State Service.

Earlier, a law came into force in Russia, according to which debtors will be able to get rid of the ban on leaving the Russian Federation right at the airport in a few minutes . ■

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The Russian economy has shown phenomenal resilience

The economy and budget of Russia experienced a very unusual period in 2022, which will definitely remain in the history books. Despite the colossal sanctions pressure from the West, the economy of our country not only did not collapse, but even strengthened in a number of ways - and this surprised the whole world. What made this happen?

2022 brought a lot of surprises in the economy. Unprecedentedly tough sanctions were imposed against Russia. This includes the blocking of foreign exchange reserves of the Russian Central Bank, and the disconnection of many large banks from the international SWIFT settlement system. More than 1,000 foreign companies have announced their withdrawal from Russia.

"In fact, 2022 broke many of the trends that have developed over the past few decades - Russia's orientation mainly to Western export markets, capital markets and technologies. The government and the Central Bank of the Russian Federation took emergency measures to prevent the collapse of the economy. Russia began a sharp and painful turn to the East, a structural transformation" with high costs for both the Russian and European economies, and for the world economy as a whole," says Olga Belenkaya, head of the macroeconomic analysis department at FG Finam.

"The past year can be called a turning point for the Russian economy both in terms of changing partners, and in terms of changing the structure of the economy and moving to a greater degree of diversification," says Denis Perepelitsa, head of the Department of Global Financial Markets and Fintech at the Russian University of Economics. Plekhanov.

"A fundamentally new model of the Russian economy's involvement in the world economy is being formed. Changes have affected foreign economic relations, the financial sector, enterprises' access to technologies, budgets at various levels, and employment. However, it turned out that the Russian economy has a high degree of resistance to such large-scale external shocks," – notes Vladimir Klimanov, director of the Center for Regional Policy at the Institute for Applied Economic Research of the RANEPA.

Everyone was surprised at the stability of the Russian economy, from Russian experts themselves to analysts from major international banks and funds. Back in the spring, many were sure that Russia would not be able to recover so quickly from the economic shock that occurred in the winter.

"The geopolitical situation, the departure of many foreign brands from Russia and sanctions led to the collapse of the ruble in March 2022, which quite naturally led to a drop in industrial production, a drop in GDP, a sharp jump in inflation and a new round of falling real incomes of the population. That is, in the Russian economy there was a crisis,” recalls Natalya Milchakova, a leading analyst at Freedom Finance Global.

However, by the end of the year, the situation improved significantly. "The fall in GDP in 2022 is expected to be in the range of 2.5-3.5%, but this cannot be compared with the fall in GDP by almost 9% in the relatively prosperous 2009. There has never been such a deep recession as in 2009 during the crisis of 2014-2016, neither in 2020, nor now, although the crisis of 2009 was the only crisis that Russia experienced without being under Western sanctions. there was a decline," Melchakova notes.

The same can be said about inflation. The maximum level of annual consumer price inflation in Russia since the beginning of the 21st century was recorded in 2015 - this is 13%, but this maximum is not expected to be exceeded in 2022, the expert adds. If in the spring the Central Bank of the Russian Federation predicted inflation by the end of the year at the level of 18-20%, then in fact it turned out to be close to 12%. And in 2023, it is expected to go down.

Thanks to what did the Russian economy manage to survive?

Prices for gas, oil, metals, mineral fertilizers, and grain have risen sharply, and these are the main Russian export commodities. They ensured that revenues were maintained even with a physical reduction in exports, Klimanov says. The actions of the government, the Central Bank and regional authorities, which were able to promptly adopt a large-scale package of anti-crisis measures, also helped.

The stability of the Russian economy has been helped, among other things, by the growth of budget spending and preferential lending programs, the growth of investment in fixed assets and the maintenance of record low unemployment, says Belenkaya. According to her,

State support measures in aviation, construction, the automotive industry, domestic tourism, changes in trade and logistics chains, as well as the legalization of parallel imports helped mitigate the negative effect of the sanctions.

The persistence of oil exports, coupled with the collapse of imports, led to record foreign trade and current account surpluses, estimated to be around $250 billion. Together with restrictions on capital movements, this ensured a significant strengthening of the ruble. By the end of June, the dollar exchange rate against the ruble briefly dropped below even 50 rubles. The strong ruble, in turn, had a strong deflationary effect, Belenkaya points out.

“All these, at first glance, rather unexpected events in 2022, in fact, have the same explanation: in 2022, the Russian economy, firstly, is no longer as heavily dependent on hydrocarbons as it was 13 or even seven years ago; secondly, the Russian economy is no longer as dependent on imports from Western countries as it was during previous economic crises,” says Milchakova.

According to her, for almost 20 years the Russian economy has been built on a rather vulnerable economic model codenamed "oil and gas in exchange for cars and consumer goods." However, the Russian food embargo imposed in 2014 on many types of food from the “sanctioned” countries helped in many ways to get rid of excessive dependence on imports, and in 2022 to mitigate the effects of sanctions.

Another important point: in 2022, Russia stopped counting on assistance in the form of investments from the West, and on the other hand, it began to strengthen cooperation with friendly countries from the BRICS group, the EAEU and OPEC +, Milchakova notes. The active process of de-dollarization of the Russian economy, which began in 2022, will continue, and the places vacated on the Russian market will be occupied by domestic companies.

Despite the sanctions, Russia showed an increase in housing construction, road construction, as well as in agriculture. So, already in 11 months of 2022, a record number of housing was built in Russia - 93.26 million square meters of housing. Commissioning volumes exceeded last year by almost 15%, although 2021 was a record year for housing commissioning in the entire history of our country, including the Soviet period.

2022 was also the best year in Russia in terms of the pace of road construction since the times of the USSR. This year, 165 million square meters of asphalt were laid on regional and local roads (against 162 million square meters last year).

Agriculture in the outgoing year shows growth. For ten months, the output increased by 5%. The harvest of grains - and this is the main commodity for export in agriculture - has been repeatedly adjusted upwards. By the end of the year, it became clear that this was again a record harvest. The Ministry of Agriculture reported 159 million tons of grain, of which over 105 million tons is wheat. Also, the development of industry is helped by a good loading of defense industry enterprises.

"So the negative events of 2022 for Russia turned out to be just one of the many crises that needs to be experienced in order to become stronger and overcome dependence, firstly, on the import of consumer goods, and secondly, to generally resolve the issue in order not to rely too much for imports, but to produce non-food products on their own," concludes Milchakova.

“In general, the situation is stable. With an effective transformation of the Russian economy at the end of 2023, it can move to growth. However, this will happen provided that the global recession does not start, and the chances of its beginning are very high,” warns Perepelitsa, from the Russian Economic University named after . Plekhanov.

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2023 will rebuild the Russian economy, by Olga Samofalova for VZGLYAD, 01.08.2023.

The coming year 2023 could be even more difficult in terms of the economy than 2022. With a high probability, we will see a drop in the volume of exports of Russia's most profitable goods, oil and gas, which means that the budget will also suffer. However, our country has an answer to this challenge.

In 2022, Russia was able to avoid a sharp drop in GDP (unlike what happened in 2009) and acceleration of inflation to record levels. In 2023, the Russian economy is expected to even improve its most important indicators.

“Inflation should slow down to 5-8%, the decline in GDP may not exceed 1%. But in Europe, the probability of a recession is above 50%,” says Natalya Milchakova, a leading analyst at Freedom Finance Global.

Alfa-Bank expects a sharp decline in inflation in April 2023, but growth will accelerate to 6% by the end of the year. Compared to inflation of 12% last year, this will be an excellent result.

But the ruble, most likely, will not be so strong. The strengthening of the ruble has already played its role in curbing inflation. In 2023, the ruble rate will fall to 70–80 rubles per dollar, according to most Russian companies. This will already be necessary to support the income of the Russian economy from exporters and budget revenues.

The chief economist of Alfa-Bank, Natalia Orlova, believes that the weakness of the Russian currency will not lead to an acceleration of inflation. The Russian Central Bank may continue to lower the rate to 6% to help the economy and the budget.

“We are considering two macroeconomic scenarios for the coming year – base and stress,” says Natalya Lavrova, chief economist at BCS World of Investments. – The baseline scenario assumes that in 2023 the global economy will grow by 2.5%. Under the stress scenario, we analyze the resilience of the Russian economy to a global slowdown, assuming that global economic growth may decline from the expected 3.1% in 2022 to 1% in 2023.”

In the baseline scenario, Russian GDP will continue to decline in early 2023, but will resume moderate growth closer to the second half of the year. GDP in 2023 will decline by 2.6%, but in 2024 it will grow by 1.4%, which corresponds to the pre-crisis potential growth of the economy, Lavrova notes.

“The main challenge of 2023 may be the change in the economic model of Russia itself. The Russian economy is no longer focused only on the supply of raw materials to the West, as it was before 2022. Now exporters of oil, metals, mineral fertilizers are redirecting their supplies to the East,” says Milchakova.

Russian business has no problems finding new clients. There are enough people willing to buy Russian hydrocarbons, metals and other raw materials. China and India will play a huge role in this regard, given their significantly higher consumption compared to the European market.

“Much more important is the establishment of a new infrastructure for the export of raw materials in the eastern and southern directions. We will have to solve the problem of a shortage of tankers for the transportation of oil, the problem of cargo insurance, build new ports on the Black Sea instead of the Baltic, including oil loading ports. Russia needs new gas pipelines and infrastructure for the production and transportation of LNG, and so on. It will not be possible to cope with all these challenges within one year, the construction of new infrastructure will take at least two to four years,” says Milchakova.

Another challenge the Russian economy will face in 2023 is the decline in oil and gas production. In 2022, Russia has existed in comfortable conditions, since sanctions against oil were introduced only at the end of the year. And Russia was able to redirect energy flows to China, India and Turkey. This made it possible to increase oil production in 2022 by 2% (up to 525 million tons) and increase the output of petroleum products by 5%.

In the new year, Russia will have to face a decline in oil production. According to Deputy Prime Minister Alexander Novak, in response to the ceiling on oil prices, Russia will reduce oil production at the beginning of the year by 5-7%, or 500-700 thousand barrels per day.

Russian gas production decreased by 18–20% already in 2022, to 671 billion cubic meters (of which 470 billion were consumed by the domestic market). The decline in production may continue in 2023 if the Ukrainian gas delivery route is completely blocked. All this will lead to a drop in the export of raw materials, and this is a key source of income for the Russian budget.

“Significant export earnings in 2022 will be almost impossible to maintain on the horizon of 2023. Crude oil exports may suffer given the introduction of a ceiling on oil prices. Gas exports could fall by 50% in 2023 due to declining supplies to the EU.

The export of petroleum products, which will face restrictions from February-March 2023, will be difficult to redirect from the EU to Asia due to low demand for these goods in Asian markets. These three product categories account for approximately 50% of total export earnings and their dynamics will have a major impact on the Russian trade balance,” explains Natalia Orlova.

The decline in budget revenues is, in fact, another challenge in 2023. “According to our estimates, the gap between the planned budget revenues and the actual figure could be 1 trillion rubles. Thus, the budget deficit in 2023 may exceed 2.4% of GDP and remain approximately at this level in 2024. This means that the search for sources of income may remain on the agenda of the authorities,” notes Natalia Lavrova.

However, Russia has the resources to close budget gaps. According to the expert, the government, as an alternative, can continue to increase its debt obligations, although Russia still remains the country with the lowest level of public debt compared to both developing and developed countries. On the other hand, the authorities can direct funds from the National Wealth Fund (NWF) to cover the deficit.

Another challenge is import substitution. “Low oil prices will lead to more modest export flows, but they will be partially offset by weak imports. Although imports even in 2024 will remain 5% below the pre-crisis level of 2021, because a significant part of Russian imports are under sanctions and are unlikely to be completely replaced by goods from other countries,” explains Lavrova. All this will lead to a narrowing of the current account surplus and to the weakening of the ruble.

According to Orlova, imports of goods to Russia had already recovered strongly by September, and in the third quarter they were only 6% below the average monthly level in 2021. Russian imports from China have already fully returned to pre-crisis levels.

However, the expert sees Russia's growing dependence on China. For example, car imports from China grew by a third in ten months of 2022. Imports from Turkey have tripled. Orlova worries that as we enter 2023, import substitution is no longer at the center of the economic agenda, and it is the expansion of trade ties with China, Turkey and India that is becoming increasingly important against the backdrop of declining imports from the EU.

“In 2023, it is necessary to lay the foundations so that the pain points of the economy, which were previously replaced by imported products, can be turned into points of its growth. Previously, Russia relied on the import of many goods from Western countries and from China, but now it is important to create our own production. If the state is properly puzzled by the idea of ​​developing, for example, its own high-tech industries, and starts investing at least part of the NWF funds in them, then in 10 years, and maybe even earlier, we will become competitors to China and even South Korea and Japan in production, for example , consumer electronics and appliances,” says Natalya Milchakova.

That is, it is important that the state invests in the private sectors of the economy and creates conditions for profitable private investment. This has already been done, for example, in agriculture.

https://vz.ru/economy/2023/1/8/1192377.html