New Delhi: The Russian Ministry of Economic Development has revised its forecast for inflation from 17.6 percent to 13.4 percent as of the end of 2022. According to the document, inflation will gear down to 5.5 percent in 2023. The consumer price index is expected to gain 4.2 percent in 2024 and 4 percent in 2025.
The ministry expects the national gross domestic product (GDP) to decline by 4.2 percent as of the end of 2022. As indicated in the draft outlook, the national GDP will stand at 144.9 trillion rubles ($2.37 trillion) in 2022. GDP is expected to contract by 2.7 percent in 2023. The recovery is anticipated to start in 2024 (+3.7 percent and continue in 2025 (+2.6 percent), according to the document.
The ministry also expects Russia’s trade balance to be $299.6 bln as of the end of 2022 and its further decline. The document forecasts that exports will grow to $585.3 bln in 2022 and imports will decline to $285.7 bln. A surplus of $190.8 bln is expected in 2023 on account of lower exports and higher imports ($505.4 bln and $314.5 bln accordingly). The macroeconomic outlook anticipates a smaller decrease in exports against a more active import recovery in the next two years. According to estimates in the draft document, the trade balance surplus will stand at $169.2 bln in 2024 and $153.6 bln in 2025.
“We had an extremely high trade balance in the first six months of the year. The trade balance is expected to contract gradually on account of recovering imports and certain drop in exports by the need to redirect export flows to new destinations and certain losses related to such refocusing,” a federal government official familiar with the macroeconomic forecast discussions told reporters.
The Ministry of Economic Development expects Russia’s retail trade turnover to decline by 6.6 percent as of the end of 2022. The ministry expects the retail trade turnover to gain 2 percent in 2023, 5.6 percent in 2024, and 2.4 percent in 2025.
The draft paper also anticipates that paid services to the population will tumble by 1.5 percent as of the end of this year but will rise by 1.3-2.8 percent in 2023-2025.
The ministry revised its forecast for the country’s unemployment rate from 6.7 percent in the May outlook to 4.8 percent as of the end of 2022. The average annual unemployment rate is expected to be 5.2 percent in 2023 and 4.6 percent in 2024, while the forecast for 2025 provides 4.5 percent. The unemployment rate is expected to be the highest in late 2022 – early 2023, the government official noted.
“Some industries and regions are expected to face workforce shortages, while others will have to deal with unemployment at some point. This is related exactly to the structural transformation of the economy,” the official said.
(Vinayak)