— Anatoly Gennadievich, in 2022, Russia is facing unprecedented external pressure. Nevertheless, the apocalyptic predictions that sounded in the spring did not materialize. What do you associate it with? How do you assess the current state of affairs in the economy?
— The Russian economy is stable: many enterprises are already increasing output volumes and are engaged in import substitution.
And we are talking not only about the military industry, but also about a number of other areas, for example, such as the production of heavy road equipment.
Previously, this segment was largely dependent on foreign components, but the factories were able not only to import part of the parts for parallel imports, but also to replace spare parts with Russian counterparts.
In general, there is an economic downturn, but it is largely due not to the problems of domestic consumption, but to external factors.
Western countries have introduced many trade restrictions and refuse to buy Russian products.
Accordingly, a number of our companies were forced to reduce their production volume.
Anatoly Aksakov - about the situation in the Russian economy
Nevertheless, the decline in GDP this year is small - less than 3%, although initially it was predicted more than 10%, then 6-5%.
That is, the situation has improved by the end of the year, so I look at it with optimism, expecting that next year there will even be growth.
And this is not only my opinion, but also many experts.
Let the growth be small - about 1.5%, but this is still a movement forward.
— How ready was the economy in general for the challenges that Russia faced this year?
A lot of work has been done since 2014.
If we talk directly about the financial sector, we have created a system of fast payments (FPS), a system for the transmission of financial messages (SPFS) - the so-called analogue of the SWIFT platform.
In addition, many other mechanisms have been developed to replace the instruments that we previously used based on agreements with international organizations and world banks.
As a result, now we see that, for example, the SPFS is working successfully, not only Russian banks and organizations are already involved in it, but also the institutions of many other countries.
Moreover, we are accepting more and more applications from foreign companies to connect to the system so that they do not depend on SWIFT, can easily make payments or receive funds from Russian organizations.
So, even before the start of the NWO and the new sanctions, many measures were taken that made it possible to pass this difficult period relatively calmly.
— Against the backdrop of unprecedented restrictions, Russia this year also faced a rush of inflation. How do you assess the current situation with consumer prices in the country and what should we expect in 2023?
- According to the results of this year, inflation will still be slightly more than 12%.
We saw a very serious surge in prices when the special operation began.
At that moment, inflation was approaching 20%, and the Central Bank was forced to seriously raise the key rate - up to 20% per annum.
As a result, with the normalization of the situation, the establishment of parallel imports, the intensification of relations with Asian countries, with the same China, inflation began to decline, and the Central Bank lowered the interest rate to 7.5%.
I think that in 2023 inflation will slow down to 5-7%.
However, much will depend on external conditions.
The difficult situation in the global economy can have a negative impact.
For example, an economic recession is predicted in the US, while in Europe it is already actually happening, which may subsequently affect both Asian markets and Russia.
Even under the sanctions, all countries are somehow connected with each other by trade relations, and if all the economies of the world begin to decline, this will inevitably affect our exports and inflation rates.
How long will it take for the economy to fully recover? What measures are planned to be taken by the authorities for this?
- At the moment, our trade is turning to Asia and Africa.
To reorient exports, it is necessary to change traffic flows, so we have a lot to do in terms of building up the logistics of supplies and receiving goods by customers.
This will take at least two to three years.
From this point of view, 2023 will not be easy, but more favorable, since the main shock from the sanctions has passed, we have adapted to the new conditions and have shown everyone that we are quite viable and promising.
We are waiting for the restructuring of the economy.
We must lay the foundation for serious changes, and I think that by 2024-2025 the entire infrastructure will be reoriented primarily to China, India, Vietnam, that is, to rapidly developing economies with huge populations and large markets.
And our goods are needed there.
It will be a completely different world economy and a different Russia.
We will become less dependent on the European market.
At the same time, trade with the EU will, of course, continue.
Most likely, Europe itself will reach out to us again when it realizes that its sanctions are hitting itself, and Russia only benefits from this.
In a big way, what is happening now is a plus for Russia, because we have been talking about reorientation to new markets, the development of logistics and transport corridors for decades.
However, the diversification of the economy did not take place, and now they are forced to reconfigure the system precisely against the backdrop of the actions of the West.
- In 2022, the West froze part of Russia's gold and foreign exchange reserves for $300 billion and even tried to organize a default in Russia. What is the probability that we will be able to return the blocked funds? And does the country have enough money today to fulfill external and internal obligations?
- According to statistics, we have more remaining reserves than those that are frozen.
We may use reserves denominated in gold, yuan, other currencies and assets.
Their cost is estimated at more than $300 billion, and these funds are quite enough to fulfill all kinds of international obligations, as well as ensure the stability of the development of the domestic economy.
Anatoly Aksakov - about the gold and foreign exchange reserves of Russia
As for the frozen assets, we will obviously sue Western states.
These countries only talk about the rule of law, but in fact they violate it grossly.
Naturally, they will try to get their hands on our reserves and are already making such attempts, but if we follow the law strictly, this is impossible.
Subsequently, part of the frozen assets can be spent on the restoration of Ukrainian infrastructure, but only by us, when Ukraine adapts and joins our family, becoming part of our common economy.
This is necessary in order to create a new system that will ensure continuity - not only historical and national, but also infrastructural.
— This year, the United States announced that it would no longer consider the Russian economy as a market economy. At the same time, the States themselves, together with other Western countries, for the first time began to use non-market measures of pressure on Moscow. We are talking about the price ceiling for our resources. How do you assess the possible consequences of such initiatives?
In principle, the restrictions against Russia introduced this year have already hit the West.
The dollar has begun to depreciate against other reserve currencies in recent months, and an economic crisis is looming in Europe.
Inflation there approached 10%, although earlier it was zero and even negative.
All this suggests that the United States is hitting its economy and its own citizens with anti-Russian sanctions, and the EU is suffering even more from this.
Anatoly Aksakov - about non-market measures of the West
Their actions are political, not economic.
I would even say that this is not just a dictatorship, but elements of a fascist regime that is trying to command the whole world with the help of a cudgel.
Therefore, all countries now have their fingers crossed, including those who even depend on the United States, root for us and would like us to put in place the one who is trying to dictate his will in the world by non-market, non-economic methods.
- If we talk about the impact of these measures on Russia, then how seriously the introduced trade restrictions and price ceilings can affect our exports?
— To a large extent, we have already reoriented our economic model of interaction with other countries.
Naturally, we have increased deliveries of a number of goods to China, India, other states of the Asian region, as well as to Africa and Latin America.
However, fine-tuning processes takes time.
This will take another two or three years.
As for, for example, oil, now we are losing in price, because the circle of consumers is limited and buyers are asking for a discount.
In this regard, the question of how to deeply process
commodities and then sell them on world markets.
At the same time, we can successfully use the technologies of the same Asian countries, comparable to Western ones, as well as our own developments, which previously did not find an outlet even on the Russian market.
— One of the key challenges this year was the mass exodus of foreign companies from the country. How seriously did this affect the Russian economy?
- According to some data, only 5% of foreign firms working here have left Russia.
That is, about 40-50% of companies made statements about leaving, but, in fact, almost all of them remain.
Either they change signs, or formally transfer this business into ownership to someone, but continue their activities.
Moreover, almost everyone claims to return to Russia after some time.
At the same time, opportunities are opening up for Russian organizations.
We have a number of enterprises focused on the civilian sector of the economy, which are seriously increasing their output.
Of course, there are certain disadvantages, as the level of competition with foreign products is somewhat reduced, and we need to think about how to maintain this competition.
However, there are also pluses: niches are being vacated in the markets and Russian enterprises can now occupy them by selling their goods to the population.
- Against the backdrop of external shocks, the ruble fell in price at a record low in the spring, after which it sharply strengthened, and now it has begun to weaken slightly again. How do you assess the current situation in the foreign exchange market and what will happen to the rates next year?
- Even at the beginning of the sanctions, there were forecasts that the dollar would rise to 200 rubles, but this never happened.
Now the value is about 70 rubles, and in the summer it even dropped below 60 rubles, which hit our exporters and some organizations that replenish the Russian budget.
It is unprofitable for us to have a strong ruble, but it is also unprofitable for it to be weak.
It is important that it be stable and that the exchange rate be within the parameters that are determined when forming the budget for the next three years.
The tax season is about to begin.
Accordingly, enterprises will sell foreign exchange earnings in order to pay taxes to our budget.
There will be more currencies on the market, and the ruble may strengthen because the demand for it will grow.
Anatoly Aksakov - about the prospects of the ruble
Nevertheless, in the long run, the exchange rate in the range of 72-75 rubles is an acceptable value for us.
Approximately in this range it will remain, based on the state of the Russian economy in which we are.
— There is a deficit in the Russian budget for the next three years. Isn't it dangerous for our economy? Are there plans to cut any key spending items?
— At the end of 2022, the volume of the budget deficit in Russia will be about 2% of GDP.
This is a perfectly acceptable indicator.
In principle, according to experts, a deficit level of up to 3% of GDP is considered normal.
Our value is less.
Next year, the deficit is expected to be about 1.4-1.5% of GDP, in 2024 - 0.8%, and in 2025 we will probably come to a balance of expenses and revenues of the treasury.
By this time, the economy has already fully adapted to such a phenomenon as a break in relations with the West.
So the situation is quite normal and does not portend risks.
All social obligations of the state will be 100% fulfilled.
Moreover, the volume of support for the population will increase based on the real level of inflation.
— If inflation continues to slow down, should we expect the Central Bank to start lowering the key rate again?
- Yes, I think the regulator can ease monetary policy a little more if inflation really goes down and reaches 5% in 2023.
In this case, most likely, the key rate may drop to 6.5%.
- In Russia, disputes around the mining of crypto-currencies and the legalization of digital money as a means of payment do not subside. In particular, it is proposed to use e-currency for international payments. Why is this needed?
- If the cryptocurrency will improve the dynamics of parallel imports, then the tool should be used.
We submitted a draft regulation on mining and cryptocurrencies for consideration, we planned to adopt it in the first reading in December, but discussions continue.
I think that in January the process will become more active, and in February we will adopt it in the final reading.
In parallel, we are working on digital financial assets.
This year there were 16 pilot editions.
In 2023, the active use of such assets will begin.
We also introduced a bill on the digital ruble.
We expect that the document will be signed by the president in the first quarter of next year and will come into force, and from the second quarter, organizations will start using the digital ruble to pay for goods and services.
The asset will be issued by the Central Bank and will have the same status as a non-cash and regular physical ruble.