The Kremlin estimates that Russia’s economy will shrink by less than 3% in 2022, while the drop next year is expected to be less than 1%, according to an outlook released today by the country’s deputy prime minister, Andrei Belousov.
The official pointed out that these numbers are better than expected and create “good conditions” for the growth of citizens’ real income and the state’s tax revenue.
Despite the war in Ukraine and international sanctions against Moscow, the numbers are better than expected.
In late July, the International Monetary Fund (IMF) estimated a 6% drop in Russia’s gross domestic product (GDP) this year, while the drop in 2023 will be 3.5%.
In its latest monthly report released earlier this month, the International Energy Agency explained that oil production fell by just 310,000 barrels per day through July compared to pre-war levels. The country’s production exceeded 11 million barrels per day.
The Russian economy recorded growth of 3.5% in the first quarter of this year, before it contracted to 4% in the second quarter, according to the latest data released by Russian statistics agency Rostar.
The Russian administration’s data represented an improvement over estimates by the Bank of Russia, which in July expressed confidence that GDP contraction in 2022 would be lower than initially feared, which was capped between 4% and 6%. In 2023 it will oscillate between 4% and 1% before picking up again in 2024, with expansion estimated to be between 1.5% and 2.5%.