In 2022, Russian GDP contracted by 2.1% in real terms, as high oil and gas prices cushioned the fall. In 2023, the economy will not recover and will contract by 1.5%, should according to a report by the European Bank for Reconstruction and Development (EBRD).
What the report says about Russia
In February, EBRD analysts expected a 3.5% contraction in Russian GDP. The bank’s more positive outlook for Russia is driven by expectations of higher oil prices and the redirection of Russian oil in other directions, the report said.
Among the negative factors hampering Russia’s GDP growth recovery, EBRD analysts point to falling energy prices and the West’s cap on oil prices, all of which lead to lower revenues public. Moreover, since the beginning of the year, the ruble has depreciated by 10% against the dollar, which could lead to an acceleration of inflation, the EBRD acknowledged.
The Russian economy will return to 1% growth in 2024, but much will depend on the situation in the conflict with Ukraine, predicts the EBRD.
The World Bank predicts that by the end of 2023 Russian GDP will shrink by 0.2%, and analysts at the Vienna Institute for International Studies (WIIW) say that will not change. The most optimistic forecast was made by the Ministry of Economic Development – in the department to wait for growth of 1.2%.
On the influence of Russian relocators on the CIS countries
Kazakhstan (+3.9%), Armenia (+5%), Uzbekistan (+6.5%), Georgia (+5%) and Kyrgyzstan (+7%) will show strong growth in 2023, predicts the EBRD. Last but not least, the positive dynamics of GDP growth in these countries is associated with the relocation of professionals and businessmen from Russia to the country, the report follows.
The economies of the Baltic states and other Central European countries will grow by an average of 0.5%, the states of Eastern Europe and the Caucasus – by 1.5%, the report follows.
The fastest growing region in 2023 will be Central Asia, according to EBRD forecasts — the region’s GDP will grow by 5.2%, according to the report. “Growth in Central Asia is expected to remain strong at 5.2% in 2023 (revised up from February) and 5.4% in 2024. Russian business relocation and increased oil exports are driving growth. growth in Kazakhstan, while Mongolia benefits from the expansion of mining and the opening up of China.
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