Return to growth: why the IMF improved the forecast for the Russian economy for 2023 and 2024

The International Monetary Fund has improved its forecast for the Russian economy for 2023 and 2024.

This conclusion follows from the report of the organization World Economic Outlook published on Tuesday, January 31.

According to the study, already this year the volume of Russian GDP will increase by 0.3%, although earlier the organization expected a fall of 2.3%.

At the same time, in 2024, the indicator will grow immediately by 2.1%, and not by 1.5%, as previously expected.

In addition, IMF analysts revised their assessment of the Russian economy for 2022 for the third time in a row.

Thus, in the face of unprecedented external pressure, the country's GDP fell by only 2.2%.

This is noticeably less than in the pandemic 2020 (2.7%) and the crisis 2009 (7.8%).

It is noteworthy that back in October, the fund's experts predicted an economic decline in the Russian Federation at the end of last year by 3.4%, in July - by 6%, and in April - 8.5%.

Moreover, a number of other specialists initially adhered to even more pessimistic views and allowed a collapse of 10-20%.

“As you know, unprecedented sanctions aggression has been launched against Russia.

It was aimed at, in a short time, essentially crushing our economy, through the robbery of our foreign exchange reserves, to collapse the national currency - the ruble - and provoke destructive inflation.

This calculation, as we see, as, in fact, everyone sees, did not materialize, ”President Vladimir Putin said in December.

• © Mikhail Klimentiev

Recall that in 2022, after the start of Russia’s special military operation in Ukraine, Western states began to impose large-scale economic sanctions against Moscow.

Restrictions, in particular, affected the banking industry, the financial and energy sectors, aviation and trade.

At the same time, almost half of the country's gold and foreign exchange reserves (worth $300 billion) were frozen, and a number of foreign companies announced their withdrawal from the Russian Federation.

In total, almost 13.7 thousand restrictions are now in force against Russia.

This is more than against Iran, Syria, North Korea, Venezuela, Myanmar and Cuba combined, evidence from the Castellum.AI global sanctions tracking database.

Nevertheless, even under these conditions, the chain collapse of the Russian economy did not happen, said Alexander Abramov, head of the laboratory for the analysis of institutions and financial markets at the Institute for Applied Economic Research of the RANEPA.

“Business has partially managed to reorganize in trade chains and has maintained a decent growth rate.

At the same time, there was no strong drop in commodity prices, and the global demand for energy resources remained strong enough, which provided us with high export volumes, ”Abramov said in a conversation with RT.

According to him, the dynamics of household incomes and deliveries of Russian products abroad as a whole turned out to be better than expected by the IMF.

This, in turn, has become one of the key reasons for updating forecasts for 2023 and 2024, Abramov said.

At the same time, as the specialist noted, technological risks remain the main challenge for the country's economy.

“Russia's export earnings are more or less holding together and are likely to increase this year.

At the same time, there is a threat of technological backwardness due to the rupture of ties with some foreign companies.

The problem is how to replace imports of foreign technology.

It will be more difficult with this now, ”the specialist explained.

• Gettyimages.ru

However, as Russia reorients itself towards buyers and suppliers from friendly states, over time, the economy will still be able to fully recover from sanctions losses.

Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, expressed this point of view in an interview with RT.

“There is a reversal of our trade 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,” Aksakov emphasized.

According to him, against the background of the sanctions strike, the economy was significantly supported by the timely measures of the government and the Central Bank.

As a result of the decisions made, by the end of 2022 the situation in the country had stabilized, and in 2023 the dynamics of GDP could again be better than the IMF forecasts, the deputy did not rule out.

“And this is not only my opinion, but also of many experts.

Let the increase be small - about 1.5%, but this is still a movement forward, ”added the interlocutor of RT.

Asian engine

The International Monetary Fund also improved its forecast for the world economy for the current year, but slightly worsened its estimate for the next one.

According to the organization's analysts, in 2023 global GDP will grow by 2.9%, and in 2024 by 3.1%.

It should be noted that back in October, the fund's specialists expected an increase in the indicator by 2.7 and 3.2%, respectively.

This year, global GDP growth will slow down somewhat after increasing by 3.4% in 2022, said IMF chief economist Pierre-Olivier Gurinsha.

According to him, the actions of various countries to combat inflation and the events in Ukraine so far put pressure on the overall economic activity in the world.

“Despite these headwinds, the outlook looks less bleak than in our October forecast and could represent a turning point with economic growth bottoming out and inflation falling… India is on the positive side.

Together with China, it will account for half of global growth this year, compared to a tenth for the US and the euro area combined,” Gurinsha said.

According to the forecast of the fund, in 2023 the Indian economy will grow immediately by 6.1%, and the Chinese - by 5.2%.

At the same time, the volume of US GDP will increase by only 1.4%, and the Eurozone - by 0.7%.

“China is currently emerging from a three-year quarantine isolation, and India has begun to receive relatively cheap energy resources.

Thus, these countries will now be the drivers of global economic growth.

For Russia, this is an absolute plus, since both states are our main partners under Western sanctions,” Alexander Abramov concluded.