Govt standing by 2023 GDP decline forecast, up to 1% still possible - Belousov

MOSCOW. Dec 16 (Interfax) - The Russian government is standing by its forecast for GDP to fall 0.8% in 2023, First Deputy Prime Minister Andrei Belousov told reporters.

"I think [GDP in 2023] will fall up to 1%, we still think this is possible, we proceed from that. The forecast has not changed. The forecast for next year is still the same as it was," he said, when asked whether the government still thought the economy would decline by 0.8% in 2023, given the latest packages of sanctions and the West's price cap on Russian oil.

"Now, at the end of the year, we'll see where we're going, what the GDP structure and dynamics will be. So far, we see that we have a very good PMI [in November], it has grown following the October setback," he said. Purchasing Managers' Index or PMI for Russia's manufacturing sector rose to 53.2 points in November 2022 from 50.7 points in October. The Russia Services PMI grew to 48.3 points in November from 43.7 in October 2022.

Russia's GDP could decline less than recently expected in 2022, contracting approximately 2.5%, 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.

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