Russia ups economic forecasts

People rest on benches near a window of business premises put out for rent in Moscow, Russia June 8, 2022. REUTERS/Evgenia Novozhenina

Russia’s economy is expected to contract by 2.9 percent this year before returning to growth in 2023-24, Russian news agencies cited Economy Minister Maxim Reshetnikov as saying on Tuesday.

In its base case scenario, Russia’s economy ministry said it now expected a 0.9 percent GDP contraction in 2023, the TASS news agency reported – up from predictions of a 2.7 percent decline made just last month.

Reshetnikov said the economy would return to periods of growth on a quarterly basis from as early as the end of this year, with the contraction for the full year of 2023 coming from a high base effect, he said.

The economy ministry also forecast 2.6 percent growth in 2024, down from the 3.7 percent it predicted in August, and Reshetnikov said the economy was on a trajectory to post GDP growth in excess of 3 percent a year after 2024.

The new forecasts mark a significant improvement from the predictions made just last month when the Economy Ministry forecast a 4.2 percent contraction for 2022 and a 2.7 percent fall in GDP in 2023.

Reshetnikov said expectations had now improved as the Russian economy continued to weather the fallout from Western sanctions imposed over its invasion of Ukraine better than expected.