Russia

Russia Economic Forecast

Russia Economic Outlook

GDP fell at a sharper annual pace in Q4, as suggested by full-year data, which showed a 2.1% contraction in 2022. Turning to Q1, economic conditions remain muted, although activity continues to exhibit resilience to the war-induced shock. Industrial output and retail sales shrank again in January compared to December, as contracting mining activity in the wake of fresh EU sanctions hammered the energy sector. Meanwhile, household spending continued to weaken due to elevated inflation and high interest rates. That said, PMI readings pointed to healthy expansions in both the manufacturing and services sectors in February. Less positively, Russia’s budget deficit soared to USD 34.2 billion in January–February on eroded oil and gas revenues. Meanwhile, the war in Ukraine rages on, with direct and indirect war-related costs set to weigh on the Russian economy in Q1 and beyond.

Russia Inflation

Inflation ticked down to 11.8% in January (December: 11.9%), marking an 11-month low. That said, inflation expectations rose in February, signaling a potential reversal in the downward trend. Nevertheless, inflation is seen cooling notably by year-end due to a tough base effect, high interest rates and sluggish domestic demand. Risks are skewed to the upside, however.

Russia Economic Data

2017 2018 2019 2020 2021
Population (million) 147 147 147 146 146
GDP (USD bn) 1 1 1 1 1
GDP per capita (USD) 10 11 11 10 12
GDP (EUR bn) 1 1 1 1 1
GDP per capita (EUR) 9 9 10 8 10
GDP (RUB bn) 91 103 109 107 135
Economic Growth (Nominal GDP, ann. var. %) 7.3 13.1 5.5 -1.8 25.7
Economic Growth (GDP, ann. var. %) 1.8 2.8 2.2 -2.7 5.6
Domestic Demand (ann. var. %) 4.1 2.2 3.1 -4.0 9.4
Private Consumption (ann. var. %) 3.7 4.3 3.8 -5.9 10.0
Government Consumption (ann. var. %) 2.5 1.3 2.4 1.9 2.9
Fixed Investment (ann. var. %) 4.7 0.6 1.0 -4.0 9.1
Exports (G&S, ann. var. %) 5.0 5.6 0.7 -4.2 3.3
Imports (G&S, ann. var. %) 17.3 2.7 3.1 -11.9 19.1
Industrial Production (ann. var. %) 3.8 3.5 3.4 -2.1 6.3
Retail Sales (ann. var. %) 1.2 2.8 1.9 -3.2 8.8
Wages (ann. var. %) 3.5 7.0 2.7 2.4 2.8
Unemployment (% of active population, eop) 5.1 4.8 4.6 5.9 4.3
Unemployment (% of active population, aop) 5.2 4.8 4.6 5.8 4.8
Fiscal Balance (% of GDP) -1.4 2.6 1.8 -3.8 0.4
Public Debt (% of GDP) 14.3 13.6 13.7 19.2 17.0
Money (ann. var. of M2 %) 10.5 11.0 9.7 13.5 13.0
Inflation (CPI, ann. var. %, eop) 2.5 4.3 3.0 4.9 8.4
Inflation (CPI, ann. var. %, aop) 3.7 2.9 4.5 3.4 6.7
Inflation (PPI, ann. var. %, aop) 7.7 11.9 3.2 -3.4 24.6
Key Rate (%, eop) 7.75 7.75 6.25 4.25 8.50
10-Year Bond Yield (%, eop) 7.58 8.73 6.23 5.91 8.42
Stock Market (ann. var. of MICEX %) -5.5 11.8 29.1 8.0 15.2
Exchange Rate (RUB per USD, eop) 57.6 69.4 62.1 74.0 75.0
Exchange Rate (RUB per USD, aop) 58.3 62.8 64.7 72.3 73.7
Exchange Rate (RUB per EUR, eop) 69.1 79.3 69.7 90.5 85.3
Exchange Rate (RUB per EUR, aop) 65.8 74.1 72.4 82.5 87.1
Current Account Balance (USD bn) 32.2 115.7 65.7 35.4 122.3
Current Account Balance (% of GDP) 2.0 7.0 3.9 2.4 6.9
Merchandise Trade Balance (USD bn) 115 195 166 93 190
Merchandise Exports (USD bn) 353 444 420 334 494
Merchandise Imports (USD bn) 238 249 254 240 304
Merchandise Exports (ann. var. %) 25.3 25.8 -5.4 -20.5 48.2
Merchandise Imports (ann. var. %) 24.5 4.4 2.0 -5.4 26.6
Foreign Direct Investment (USD bn) 26.0 13.2 32.1 10.4 38.2
International Reserves (USD bn) 433 468 554 596 631
International Reserves (months of imports) 21.8 22.6 26.2 29.8 24.9
External Debt (USD bn) 518 455 491 468 482
External Debt (% of GDP) 32.9 27.5 29.0 31.5 27.1

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