15 Dec 2022 15:45

Russian GDP expected to contract 2.5% in 2022 - Putin

MOSCOW. Dec 15 (Interfax) - Russia's GDP could decline less than recently expected in 2022, contracting approximately 2.5%, Russian President Vladimir Putin said at a meeting of the Council for Strategic Development and National Projects.

"A decline in GDP of approximately 2.5% is projected at the end of the year [in 2022]. I recently said 2.9% [decline in 2022, the official government forecast], but the latest forecasts speak to it being less at 2.5%," Putin said.

He reiterated that "unprecedented sanctions aggression has been launched against Russia, with the aim of essentially crushing our economy very quickly, crashing our national currency, the ruble, by robbing us of our foreign exchange reserves, and triggering ruinous inflation."

Initially, "when the collective West bombarded us with economic war," many Western and "some of our experts" predicted the Russian economy might shrink as much as 20% on 2022, Putin said.

"That prediction was misplaced, as everyone can see," he said, adding that "we succeeded in stabilizing the situation."

"Moreover, as early as the third quarter, the economic dynamics showed a slight increase [seasonally adjusted]," after the lows of the second quarter," he said.

The Federal Statistics Service (Rosstat) released its first estimate for Russian GDP in the third quarter on December 14, estimating that the economy shrank by 3.7% year-on-year after contracting by 4.1% in the second quarter and growing by 3.5% in the first quarter.

Rosstat thus revised its tentative estimate for the contraction of the economy in the third quarter made in mid-November, when it put the slump at 4.0%. Rosstat's estimate for the first nine months of 2022 has also been revised slightly to a year-on-year decline of 1.6% from the tentatively estimated 1.7%.

The Russian economy grew by a seasonally adjusted 0.4% quarter-on-quarter in the third quarter of 2022, the Economic Development Ministry said on Wednesday in comments on the GDP estimate for the quarter.

The Econ Ministry in its official forecast expects GDP to shrink 2.9% in 2022 and another 0.8% in 2023, but then to grow by 2.6% annually in 2024-2025. The Central Bank of Russia's forecast for 2022-2025 is more conservative; it expects GDP to decline by 3-3.5% in 2022 and by 1-4% in 2023, and grow by 1.5-2% annually in 2024-2025.

The consensus forecast of analysts polled by Interfax in early December projects that GDP will shrink by 3.0% in 2022 and 2.7% in 2023