The Central Bank warned of an inevitable decline in living standards

Experts came to the conclusion that the very need for import substitution reduces the standard of living in the country, since it is necessary to divert labor resources to import substitution and maintain the capital intensity of GDP at a higher level. However, the worse import substitution goes, the worse it is for the economy.

The study was conducted by Central Bank economists Maria Lymar, Alexander Reentovich and Andrey Sinyakov, according to RBC. The article they published notes that it reflects their personal point of view.

The researchers took as a basis the economic indicators of 2019, when the economy was fully open, and presented three scenarios for the development of import substitution in the country: optimistic, neutral and pessimistic.

In an optimistic scenario, experts say there are no difficulties with the creation of similar imported products within the country. It implies the absence of productivity losses in the production of import-substituting goods. Under an optimistic scenario, GDP is expected to decline and then recover within 15 years. The country will reduce the production of previously produced goods and increase the production of goods under import substitution programs. This strategy is justified in the long run.

In a neutral scenario, incomplete import substitution is implied. At the same time, the quality of domestic goods is not guaranteed. It is noted that it will be easier to replace consumer goods. At the same time, GDP also decreases at first, followed by a partial recovery. Under a neutral scenario, consumption in the country is expected to decrease. The standard of living will be lower than in an optimistic scenario.

The pessimistic scenario takes into account the low level of import substitution. At the same time, the share of domestic goods in consumption is at a minimum level. In this scenario, GDP is expected to decline by a third from the baseline scenario.

Earlier, the government identified 162 import substitution projects with implementation dates until 2030. It is planned to allocate 5.2 trillion rubles for the purpose of import substitution, almost half of which will be provided under preferential loans. The federal budget for next year provides for the allocation of five billion rubles to subsidize rates for import-substituting projects.