In 2023, the Russian economy may return to a growth trajectory, while the overall level of business and consumer activity in the world will weaken. This was announced on Wednesday, June 7, by President Vladimir Putin to the participants, organizers and guests of the XXVI St. Petersburg International Economic Forum.

"The global economy will continue to slow down, and Russia's GDP may grow by 1-2%. At the same time, it is important to make the most of the opportunities that are opening up and focus on achieving technological and financial sovereignty, building optimal cooperation and logistics, improving infrastructure, reducing inequality and poverty," Putin stressed.

According to him, Russian entrepreneurs have already done a lot to overcome the severe consequences of illegitimate sanctions and are now actively working in the new economic conditions. In the future, the country's leadership and business will continue to make efforts to solve priority tasks, such as stimulating the labor market, the president said.

"This requires close, partnership between the state and the business community on the introduction of lean manufacturing technologies and the modernization of enterprises. And of course, it will be necessary to fine-tune the system of training and retraining of personnel, improve the national employment service," the Russian leader added.

Recall that in 2022, after the start of a special military operation in Ukraine, the EU countries, the United States and a number of other Western states began to announce unprecedented economic restrictions against Russia. In total, over the past time, almost 13,3 thousand different restrictions have already been introduced against Moscow - more than against Iran, Syria, North Korea, Belarus, Venezuela, Myanmar and Cuba combined. This is evidenced by the materials of the global database on tracking Castellum.AI sanctions.

Restrictive measures, in particular, affected the banking industry, the energy sector, aviation and trade. Along with this, almost half of the country's gold and foreign exchange reserves (worth $300 billion) were frozen, and many international companies announced their withdrawal from the Russian Federation.

Against this background, back in the spring of 2022, a number of analysts predicted a powerful collapse of the Russian economy by the end of the year - in the range of 10-20%. However, the real decline in GDP from January to December amounted to only 2.1% and turned out to be even less deep than in the pandemic 2020 (2.7%) and the crisis of 2009 (7.8%).

Moreover, it was previously assumed that in 2023 the Russian economy would continue to decline. Meanwhile, in recent years, more and more organizations and departments have been improving their forecasts regarding the prospects for the country's GDP. For example, the International Monetary Fund is now waiting for an increase of 0.7% this year, the Ministry of Economic Development of the Russian Federation - by 1.2%, and the Central Bank - by 0.5-2%. At the same time, the Central Bank does not rule out accelerating growth to 2.5% in 2024.

"This means that by the end of 2024, the Russian economy will reach the level of the end of 2021. In 2025, GDP will continue to grow at a rate of 1.5-2.5%," the regulator said in a report.

"The forecast will not fulfill itself"

As explained in an interview with RT, the Minister of Economic Development of Russia Maxim Reshetnikov, the improvement in forecasts is due to several factors. In particular, according to the authorities, in 2023, wages and disposable incomes of the population in real terms, that is, taking into account inflation, should increase by an average of 5.4 and 4%, respectively. Such dynamics lead to a revival of consumer activity and an increase in domestic demand.

"Both industry and the service sector, as well as trade, construction and transport, are beginning to react to this. As a result, today we are witnessing an increase in production in many areas and an intensification of import substitution," Reshetnikov explained.

In addition, according to him, Russian exporters have already adapted to the changed external conditions and managed to establish new supply chains for goods. At the same time, investments show positive dynamics, which also makes it possible to build more optimistic forecasts, the head of the Ministry of Economic Development added.

  • Maxim Reshetnikov on improving the macroeconomic outlook

"Nevertheless, the forecast will not fulfill itself. Therefore, any improvement directly depends on the efforts that we are making. The Government, together with the Bank of Russia, on behalf of the President, is putting a lot of effort into restoring trade, restructuring transport chains and logistics, as well as normalizing the situation with financial settlements. That is, a lot of work is underway. Of course, the main burden now lies on the shoulders of business. It is entrepreneurs who ensure economic growth, and these figures largely depend on their moods, perseverance, strength, faith in themselves and our country," the minister emphasized.

The improvement in the mood of Russian business today is recorded by specialists of S&P Global. According to the organization, in May 2023, the business activity index (PMI) in the manufacturing industry of the Russian Federation increased from 52.6 to 53.5 points. Moreover, for the past 12 months, the value has continuously remained above the critical mark of 50 points, which traditionally indicates the development of positive trends in the industry.

Meanwhile, in most other countries of the world today there is a reverse process. Thus, according to the assessment of the American investment bank JP Morgan, in March 2023, the PMI index in the global industry fell below 50 points and has since been held at around 49.6. At the same time, for example, in the United States, the value fell to 48.4, and in the eurozone - to 44.8.

Against this background, the IMF expects a slowdown in global economic growth from last year's 3.4% to 2.8% in 2023. In turn, the World Bank predicts an increase in global GDP by only 2.1% this year.

In many respects, this dynamics is associated with the aggravation of inflationary and financial problems, difficulties in the labor market and the consequences of the energy crisis in a number of countries. This was told to RT by the director of the Center for Market Studies of the Institute for Statistical Studies and Economics of Knowledge at the Higher School of Economics Georgy Ostapkovich.

"Last year was difficult for many countries, especially European ones, in terms of energy. This year, too, it is not yet clear whether they will be able to fully provide themselves with oil and gas without supplies from Russia. Of course, their economic growth is still ongoing, but the slowdown is obvious," Ostapkovich concluded.