18 Nov 2022 17:12

Russia's GDP to contract 2.8%-3% in 2022, decline won't exceed 1% in 2023 - first deputy PM

BANGKOK. Nov 18 (Interfax) - Russia's GDP will contract 2.8%-3% in 2022, but no more than 1% in 2023, Russian First Deputy Prime Minister Andrei Belousov said at a press briefing on the sidelines of the Asia-Pacific Economic Cooperation summit, at which he is heading Russia's delegation.

"We're coming out fairly consistently this year [in terms of GDP dynamics] somewhere in the region of -3%, -2.9%, -2.8%, approximately. We believe that we can keep to a 1% decline next year," Belousov said.

According to government estimates, the Russian economy has bottomed out in terms of consumer demand, Belousov said. "Not yet in terms of investments, but we're getting somewhere closer," he said.

"Two indicators in fact show that business is also looking at the development of the situation fairly optimistically. That's PMI first of all, which for us is conventionally over 50%. And second, it's the very low level of unemployment, very high employment, which is even below 4%. Therefore, this all speaks to the situation being quite favorable," Belousov said.

The Russian economy is currently more predictable and stable than the economic situation in the world as a whole and the economies of European states, in particular, he said.

"As concerns Europe. The situation is different there. It needs to be understood that it's not just about recession. Recession is a certain consequence. The fact is that markets have shifted, and they have been shifting since 2021, at that. You and I remember how prices for metals, relative prices for metal doubled, and everyone was guessing - is this a temporary phenomenon or not? This shifting of markets, it creates a very high level of uncertainty for producers, no one can currently organize long-term plans, and, plus, high inflation with the need to tighten monetary and fiscal policy overlaps with this, plus the debt problem hasn't gone anywhere. This combination of factors creates, of course, a very large threat to the stability of the economy, first and foremost to countries of the EU - Southern Europe and pretty much already Germany, as well," Belousov said.

"Everything is much more stable for us in that regard. Russia, as strange as it may seem, is now, perhaps, an island of stability under sanctions in this sense, it's easier to project events here [...] than in the world," he said.

Russia has already experienced the impact of restrictions, Belousov said, commenting on the risks to Russia's economy from the global recession. "As concerns the impact of the global recession on foreign trade, you know the situation now. Our foreign trade has already slumped, restrictions there are currently mainly logistic in nature. Restrictions connected to settlements, there, I think, the impact will be minimal," he said.