The Russian economy has fully recovered from the sanctions losses and by the end of 2023 may grow immediately by 2.5-2.8%. This was announced on Monday, September 18, by President Vladimir Putin during a meeting on the draft federal budget for the next three years.
"In general, we can say that the stage of recovery of the Russian economy is completed. We withstood absolutely unprecedented external pressure, the sanctions onslaught of some ruling elites in the so-called Western bloc ... Russia's GDP has reached the level of 2021, and now it is important to create conditions for further stable and long-term development," Putin stressed.
As the head of state noted, according to a number of key indicators, the situation in the economy is already developing much better than previous estimates and forecasts. In particular, the authorities record a steady increase in consumer demand, investment in fixed assets and industrial production, primarily due to the manufacturing industries.
At the same time, the state of public finances is improving, the Russian leader added. According to him, in total, in the first eight months of 2023, the country's budget was executed with a small deficit, but already in August, treasury revenues exceeded the volume of expenditures.
"It is important that non-oil and gas revenues are significantly higher than last year's figures. In turn, oil and gas budget revenues in July-August recovered approximately to the level of last year, and - taking into account the situation on world markets - active growth continues, "the president said.
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One of the main problems now, Vladimir Putin called the acceleration of inflation. In his opinion, the observed increase in consumer prices is largely due to the recent weakening of the ruble, so the government and the Central Bank need to clearly understand the causes of the incident and take the necessary measures in a timely manner. However, even in these conditions, the overall "economic situation as a whole is stable and balanced," the president said.
"In this regard, the new federal budget should be objectively calculated and drawn up, based on national priorities, our national interests, strategic and current plans in all key areas. And of course, first of all, it is necessary to guarantee the strict fulfillment of all social obligations of the state to the people," Putin concluded.
"We have enterprising people"
Recall that last year, after the start of a special military operation in Ukraine, Western countries began to announce large-scale economic restrictions against Moscow. In total, almost 15 thousand different restrictions have been introduced against Russia since then - 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 affected, in particular, 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, initially a number of analysts predicted a powerful collapse for the Russian economy in 2022 - by 10-25%. Nevertheless, the real decline was only 2.1% and turned out to be even less deep than in the pandemic of 2020 (2.7%) and the crisis of 2009 (7.8%). Moreover, according to Vladimir Putin, some experts predicted a reduction in the country's GDP in 2023. However, already in April it became clear that the indicator would return to growth and add at least 1.2%, and now this estimate has been more than doubled.
As the head of the Ministry of Economic Development of the Russian Federation, Maxim Reshetnikov, told RT, in the face of external pressure, Russian business has shown flexibility and today is actively rebuilding supply chains, payments, settlements and logistics. Against this background, the volume of private investment in the country has noticeably increased, which has become a key driver of GDP growth, the minister noted.
"We have good economic growth figures for this year ... The main thing we see is that the economic growth trend will continue until 2024, 2025, 2026 ... Over the entire medium term, the growth rate will be above 2%, which, in the context of a significant shortage in the labor market and all restrictions in logistics, technology and other areas, in general, looks normal. Although, of course, we need to work to increase the pace," Reshetnikov added.
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According to the latest estimates of the Ministry of Economic Development, from January to July 2023, the entire industry in Russia grew by 2.6% compared to the same period in 2022, and manufacturing industries by 6.1%. At the same time, investments added 7.6%, wholesale trade - 3.5%, retail - 2.4%, and agriculture - 1.4%.
At the same time, construction continues to demonstrate the highest growth rates: in the seven months of 2023, the volume of work increased immediately by 8.7% in annual terms. It is noteworthy that the industry showed positive dynamics even in 2022 against the backdrop of a general economic downturn. As Deputy Prime Minister Marat Khusnullin explained to RT, external restrictions interfere with work, but entrepreneurs still quickly adapted to the new conditions.
"Many of our builders have found an opportunity to supply through third countries. A very big plus is that a lot of things have begun to be produced domestically. Our people are very enterprising. When they see that something is gone and a free niche has appeared, they began to produce in Russia ... In total, we will have more advantages from sanctions. Yes, there are certain problems today, but this will make us stronger and more competitive. Ultimately, the country's economy will develop better," Khusnullin stressed.
In addition to the accelerated adaptation of Russian business, the actions of the authorities made it possible to contain the sanctions blow, as stated by Prime Minister Mikhail Mishustin. In particular, in order to normalize the economic situation in 2022, the authorities approved a plan of priority measures from more than 300 different initiatives worth 12.5 trillion rubles.
We are talking, for example, about credit holidays and soft loans for companies, a moratorium on inspections of enterprises and tax breaks for a number of industries, as well as the extension of the state program of preferential mortgages. Along with this, in 2022, measures to support families with children were expanded and social benefits were indexed twice.
"It (the economy. - RT) has adapted to current challenges, shows fairly steady growth. What is especially significant is based on domestic demand. First of all, thanks to the decisions that were previously taken on behalf of the president, the operational actions of the government in coordination with the Bank of Russia, "Mishustin stressed.