Russia

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Western sanctions on Russia have started to bite, and in April growth switched to negative (on a yearly basis). Private consumption has plunged on the back of declining incomes and increased saving propensity, partly reflecting tighter credit conditions, while many investment projects have reportedly been put on hold. However, the crisis is unfolding more slowly than initially expected, leading us to improve our growth forecast for 2022 by 2 percentage points compared with our spring forecast, to -7%. The main reason for this is the unexpected recovery of the Russian rouble on the back of high energy prices and the dramatic collapse of imports. The rouble is now trading at above pre-war levels, thereby depressing import prices and – last but not least – supporting overall public confidence in the resilience of the economy. However, the impact of trade sanctions and the mass withdrawal of foreign firms has yet to unfold fully, with a wide range of industries – from automotive to pharmaceuticals to aviation to food processing – already reporting shortages of imported inputs and inventories gradually being depleted. The EU oil embargo that will take effect at the end of 2022 will add to the economic pains, as will any further curtailment of gas exports by Russia. For these reasons the recession next year is likely to be deeper than previously expected. It is not until 2024 that the economy will finally settle on a new – and much lower – plateau, where it will probably stay for years to come.
        FORECAST*
Main Economic Indicators201920202021202220232024
Population, 1000 persons146765146460145825...
GDP, real change in %2.2-2.74.7-7.0-3.01.0
GDP per capita (EUR at PPP)199201893022490...
Gross industrial production, real change in %3.4-2.15.3...
Unemployment rate - LFS, in %, average4.65.84.86.06.05.5
Average gross monthly wages, EUR660623648...
Consumer prices, % p.a.4.53.46.715.69.73.7
Fiscal balance in % of GDP1.9-4.00.80.0-3.0-2.0
Public debt in % of GDP12.417.616.0...
Current account in % of GDP3.92.46.912.59.08.0
FDI inflow, EUR m28548829633639...
Gross external debt in % of GDP29.029.228.4...


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

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Monthly Report No. 7-8/2022

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Bernhard Moshammer, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Nina Vujanović, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2022
58 pages including 4 Tables and 21 Figures

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Executive summary

Vasily Astrov
in: Overshadowed by War and Sanctions
wiiw Forecast Report No. Spring 2022, April 2022 , pp. I-VII
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