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- High-speed mode: how has the growth rate of the Russian economy changed in recent years
High-speed mode: how has the growth rate of the Russian economy changed in recent years
The growth rate of the Russian economy has exceeded 4% in two years, said Maxim Reshetnikov, head of the Ministry of Economic Development. This is better than the performance of most G20 countries. Izvestia investigated the growth forecast for this year and the ways in which the government is trying to increase this figure.
Changing the economy
According to the medium–term forecast of the Bank of Russia, GDP growth in 2025 will be 1.0-2.0%, the press service of the Central Bank reminded Izvestia. This is a restrained forecast reflecting the ongoing foreign economic uncertainty and the ongoing sanctions regime, Alexander Firanchuk, a leading researcher at the Russian Academy of Economic Sciences, told Izvestia. At the same time, the consensus among professional analysts surveyed by the Bank of Russia is close to this estimate and is about 1.5%.
At the same time, according to the expert, with a favorable external economic environment, primarily in the case of more dynamic export development, GDP growth may approach the more optimistic estimate of the Ministry of Economic Development at 2.5%. To stimulate economic growth, a comprehensive government strategy is being implemented, combining short-term support measures with long-term structural initiatives.
"The priority remains infrastructure projects aimed at reducing logistical constraints and improving the efficiency of foreign economic activity, including the development of the transport network, expanding the capacity of key routes and upgrading logistics hubs," said Alexander Firanchuk. — Government support is also focused on industries with import substitution potential, primarily in the field of information technology and manufacturing.
Tax incentives, subsidies and other forms of support are applied in these sectors, he said. Additional attention is paid to the development of non—primary exports, from financial instruments and support for entering new markets to logistics solutions. There is also a focus on expanding trade relations with neutral countries and simplifying the import of critical goods and technologies necessary for the current functioning and modernization of the economy.
— Along with this, measures for the development of human capital remain in focus.: improving the education system, supporting healthcare and initiatives aimed at increasing the active life expectancy of the population are considered as key elements of sustainable growth," the expert added.
If you look at foreign sources, the IMF gives a forecast for the growth of the Russian economy of 1.5%, and according to the results of a Reuters survey — 1.6%, Mikhail Gordienko, professor of Finance for Sustainable Development at Plekhanov Russian University of Economics, told Izvestia. The generalized "fork" of forecasts is 1-2.5%, and the spread is explained by the different weight of one of several variables — the implemented monetary policy, the adaptation of the country's economy to sanctions pressure, the dynamics of domestic consumption, as well as indicators on energy and commodity markets.
— Growth is gradually slowing down, and this is a serious challenge. The reasons for the slowdown in economic activity were also heard in expert discourse, and they were repeated at the SPIEF: expensive money at a key rate of 20%, sanctions restrictions with their additional costs, vulnerable exports," he said.
The economy will grow by about 1%, Rafael Abdulov, associate professor of the Department of Economics at MISIS University, confirmed in an interview with Izvestia, because economic stagnation is not excluded. It is impossible to maintain the high growth rates that were in previous periods due to the overheating of the economy. Current aggregate demand exceeds aggregate supply, resulting in a shortage of staff, rising inflation and, consequently, a slowdown in real GDP growth.
This year, growth is expected to reach 1.5% due to high interest rates and a cooling economy, Anton Tabakh, chief economist at the Expert RA rating agency, told Izvestia. At the same time, the 2023-2024 figures for GDP growth are unlikely to be repeated in the next three years.
Different points of view
Forecasts for the dynamics of the Russian economy in 2025 are different, Pavel Seleznev, Dean of the Faculty of International Economic Relations at the Financial University under the Government of the Russian Federation, member of the Expert Council of the Higher Attestation Commission of the Ministry of Education and Science of the Russian Federation on law and political science, told Izvestia. The latest budget forecast is 2.5%. However, there are more modest estimates, at the level of about 2% or even less.
According to statistics from the Financial University, according to him, today there is a failure in the purchase of new cars and car loans. At the same time, it is clear that this is a high-base effect. Last year, on the eve of increased recycling, people bought a lot of cars, and now there is a lull in the market.
— On the other hand, we see advantages in all other indicators. The number of companies recruiting employees is still growing, and the number of those who go to fitness and gyms is also increasing. There is a steady increase in real incomes, which also indicates the willingness of businesses to raise salaries. And this would not be possible without the prospects for economic growth. The models we have show that the forecast for GDP growth is closer to the optimistic value of 2.5%. Of course, this is not the limit of dreams, it would be nice to keep it at 4-5%. But taking into account the high base of the successful last year and 2.5%, this is also not bad," he noted.
In his opinion, it is possible to increase economic growth by expanding government orders, accompanied by an increase in government spending. This is happening now. The latest budget adjustment for 2025, approved by the president, indicates that budget expenditures are increasing to 42.3 trillion rubles against 41.5 trillion previously allocated.
— This also includes the extended provision of preferential loans for investments, the rate of which is subsidized by the state budget. The second opportunity to increase economic growth is to reduce the interest rate, which will enable businesses to implement a supply—side economy model, that is, to develop through long-term cheap loans. But you shouldn't count on a low rate in the next couple of years. Well, the third possibility is simplification of doing business, removing excessive regulatory burden, facilitating access to infrastructure and other measures of the same order. Today, the Russian government is moving mainly in the first and third directions. We hope that these efforts will be quite successful," Pavel Seleznev added.
The reasons for the slowdown in growth are measures to cool the Russian economy: a high key interest rate and an attempt to achieve some balance between supply and demand in the commodity market in order to limit the rise in inflation, Alexander Abramov, head of the RANEPA Laboratory for the Analysis of Institutions and Financial Markets, told Izvestia.
"To some extent, the government and the Central Bank are coping with this task, but in conditions of a high key interest rate, in order to maintain economic growth, it seems to me that the main focus is on increasing labor productivity and stimulating those industries that help contain inflation," he said.
In order to achieve high growth rates, the government focuses on developing the supply-side economy, Sergey Katyrin, President of the Chamber of Commerce and Industry of the Russian Federation, told Izvestia. We are talking about stimulating investments, technological renewal of production facilities, expanding our presence in new export markets and strengthening domestic demand.
At the same time, a lot of work, according to him, is being done to support the non—resource sector - agriculture, logistics, IT, and the manufacturing industry. First of all, in the segment of small and medium-sized enterprises (SMEs). As practice has shown, the most demanded measures among SMEs are preferential loans, umbrella guarantees, leasing programs and guarantees from regional funds. They are the ones that have the greatest effect in increasing business productivity and sustainability.
Izvestia sent a request to the Ministry of Economic Development, but no response had been received at the time of publication.
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