Russia’s Economy Ministry has revised upward its forecast for GDP growth in 2023 from a 0.8% decline to a 1.2% increase, but downgraded its forecast for 2024 amid a trend that points to a slowdown in growth prospects over the long term, it said Reuters.
This week, the International Monetary Fund also upgraded its growth forecasts for Russia’s economy in 2023, but warned that the country could face a much larger budget deficit and a much smaller current account surplus this year. Russia’s global isolation and declining energy revenues could affect the growth potential of the Russian economy for many years, the IMF believes.
Russia’s economy ministry expects GDP to grow by 2% in 2024, after forecasting growth of 2.6% in the fall, and the unemployment rate to remain at a low 3.5% until 2026.
In 2022, the Russian economy shrank by 2.1%, and before the invasion of Ukraine, the authorities in Moscow predicted GDP growth of 3%.
Russia’s current account surplus narrowed significantly in the first quarter of 2023, and the Ministry of Economy expects a current account surplus of $86.6 billion this year, against a previous forecast of $157.6 billion.
This year, the ruble depreciated by about 10%, becoming the third worst indicator among world currencies in the context of the consequences of Western sanctions.
International sanctions imposed on Russia in response to its invasion of Ukraine, including the $60 per barrel crude oil price ceiling imposed by the G7 (a group of highly industrialized nations), have created a situation where Russian Urals oil is selling at significant prices. price discount compared to Brent oil.
Moscow relies on revenues from oil and gas exports, which totaled 11.6 trillion rubles ($154.68 billion) last year, to finance budget spending. The decline in revenues from oil and gas exports has forced Moscow to begin spending part of its foreign reserves to cover the budget deficit, which has grown due to the costs associated with the invasion of Ukraine. (Agerpress)
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Source: Hot News
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