Belousov: Russian Economy to Contract by Less than 3% in 2022

Belousov predicted that full-year inflation would be in the range of 12-13%.

Cover Image Attribute: Image by Khusen Rustamov from Pixabay
Cover Image Attribute: A Street in Moscow, Image by Khusen Rustamov from Pixabay 

According to statements made by First Deputy Prime Minister Andrei Belousov on Monday, the Russian economy will shrink by less than 3% in 2022, which is a far shallower recession than was first anticipated. Additionally, inflation will be below prior forecasts.

The widespread Western sanctions that followed Moscow's move on February 24 to send tens of thousands of troops into Ukraine were detrimental to the Russian economy and caused it to suffer a setback. However, the aftermath of the economic crisis has turned out to be less traumatic than was previously anticipated.

Russia's Ministry of Economic Development released the most recent set of economic projections in August, suggesting that gross domestic product (GDP) would contract by 4.2% this year. Earlier this year, the ministry had warned of a drop of more than 12%, which would have been the most significant one in economic output since the crisis that followed the fall of the Soviet Union in the middle of the 1990s.

Russian Slump Far More Shallow Than First Feared - Bloomberg

Belousov stated the following at a televised government meeting;

  • The GDP of Russia will decrease by "a little more than 2%" this year, and then it will fall by "no more than 1%" in 2023. He also predicted that Russia's GDP would continue to shrink until 2023.
  • Despite unprecedented sanctions and many foreign enterprises leaving Russia, the administration did not see any indicators that the labor market's situation was worsening. However, there were chances that it could. 
  • After reaching a 20-year high of 17.8% in April due to the fall of the rouble to a record low, Belousov predicted that full-year inflation would be in the range of 12-13%. According to the Eikon database, the unemployment rate for June was 3.9%, making it the lowest it has been since the statistics department began releasing the figure in 1992. 
  • As a result of Russia's reduced access to European markets, non-commodity exports are expected to drop by 17% this year. However, thanks to newly established trade routes and parallel imports, consumer goods imports have nearly reached their pre-recession levels.
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IndraStra Global: Belousov: Russian Economy to Contract by Less than 3% in 2022
Belousov: Russian Economy to Contract by Less than 3% in 2022
Belousov predicted that full-year inflation would be in the range of 12-13%.
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