Dynamic of Russian economy in Jan-Feb points to GDP growth in 2023 - Econ Ministry
MOSCOW. April 7 (Interfax) - The improvement of the World Bank's outlook for Russian GDP consolidates the trend of upward revisions of extremely negative forecasts for the country's economy, and the dynamic in January-February makes it possible to expect growth in 2023, the Economic Development Ministry said in comments on the World Bank's latest report.
The World Bank on Thursday improved its forecast for Russian GDP growth in 2023, and now expects it to contract by only 0.2% instead of by 3.3% as it did in its January forecast. However, the World Bank lowered its growth projection for 2024 to 1.2% from 1.6%. It expects the Russian economy to grow by 0.8% in 2025.
"The World Bank continued the trend set by the IMF earlier this year - upward reassessment of extremely negative forecasts for the development of the Russian economy," the ministry said in a statement. The IMF revised its forecast for Russia's GDP in 2023 to growth of 0.3% from a 2.3% drop in late January, and expects growth of 2.3% in 2024.
"Indeed, it is increasingly difficult to deny the obvious. Western experts underestimated the degree of our economy's flexibility. We managed to withstand the unprecedented sanctions pressure in large part thanks to the wager on private business," the ministry said.
"We are factoring Russian GDP growth in 2023 already into the scenario conditions of the forecast. The dynamic of indicators for January and February provides grounds for this," the ministry said, commenting on its expectations for GDP this year. The ministry plans to release an updated forecast in April.
The ministry also said that the "strategic objective is not just to adapt to the current conditions, but to take the economy to new frontiers," and "all our main instruments for supporting investment are now geared toward achieving this goal."
Russia's GDP contracted by 2.1% in 2022. The ministry estimated that GDP shrank by 3.1% year-on-year in February after falling 3.2% in January, and contracted by 3.2% in the first two months of 2023. However, the ministry said that seasonally adjusted GDP in February was unchanged from the previous month after growing 0.2% in January.
The Central Bank of Russia revised its GDP forecast on February 10, projecting growth ranging from negative 1% to plus 1%, rather than a contraction of 1-4% as in its October forecast. The Central Bank expects growth in the range of 0.5% to 2.5% in 2024 and 1.5-2.5% in 2025.
The consensus forecast of analysts polled by Interfax at the beginning of April is more pessimistic than official forecasts, projecting a contraction of 1.0% in 2023 and growth of 1.3% in 2024.