The Ministry of Economic Development predicts a two-year recession for the Russian economy

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The Ministry of Economic Development predicts a two-year recession for the Russian economy
The Ministry of Economic Development predicts a two-year recession for the Russian economy
18 May, 13:14EconomyPhoto: Фото: 1MI
The Ministry of Economic Development predicts that the Russian economy will shrink in the next two years. This year, the fall will reach a record 7.8% since the crisis of 2009, and next year - another minus 0.7%.

This forecast is made taking into account the fact that Western sanctions against Russia will remain at least until 2025, Vedomosti writes.

The peak of the recession is expected in the fourth quarter of this year. Recovery growth of 3.2% and 2.6%, respectively, is expected in 2024 and 2025, according to the forecast.

“Now the economy as a whole has stabilized. At the same time, we have lowered our expectations for the pace of its recovery, shifting forecasts for the start of recovery from the third to the fourth quarter of this year,” commented RBC in the department.

The main challenge is associated with the disruption of supply chains and a significant decrease in the share of equipment imports, which, in turn, leads to the need to reconfigure production. The ministry expects a 27% decline in imports this year.

Economic development will be determined by the foreign trade balance, according to the ministry.

"For the first time in modern history, we are entering a recession with high commodity prices," the spokesman said.

At the end of the year, inflation is expected to be around 17.5%. In 2023, it will slow down to 6.1%, and from 2024 it will return to the planned level of the Central Bank of the Russian Federation in the region of 4%.

The ministry expects that the incomes of the population will recover faster than the country's economy. This year, the real disposable income of the population is expected to decline by 6.8%, and next year it is expected to grow by 1.3%.

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