The Ministry of Economy of the Russian Federation has revised the macroeconomic forecast for 2022-2025. The budget planning will now proceed from a two-year mild recession, recovery growth from 2024, slightly higher inflation, and wage returns, as well as real incomes and unemployment at 2021 levels by 2025.
Like the Bank of Russia (Central Bank), the government assumes that the recession will peak in 2022, and 2023 will not be fundamentally different from 2022.
Oil and gas exports are expected to decrease, regardless of the EU's decision on the oil and gas embargo. At the same time, in the medium term, there is an increase in the oil and gas dependence of the Russian economy.
The forecast is made for the baseline scenario, which is based on the current severity of sanctions against the Russian economy and their medium-term effect.
By the end of 2022, it is planned to reduce the export of goods by 14% compared to 2021 in real terms (oil and gas by 8%, others — by 20%), it will be accompanied by a decrease in imports by 27%. As a result, the forecasted balance of the current account will be a record for the country — $190.2 billion.
It is expected that the Russian Federation will earn amounts comparable to the funds of its international reserves managed by the Central Bank that were frozen by the EU, U.S., Canada, and Japan.
Oil and gas exports in money terms will drop until 2025, when they will amount to $204.7 billion, while other exports will begin to recover in 2024 and almost reach pre-crisis levels in 2025 after a collapse in 2022.
Unemployment will reach a peak (6.7% according to the ILO methodology, an increase from 4.8% in 2021) already by the new year, and after that it will remain at 6.6% in 2023 and begin to decline in 2024.
The decrease in real wages in 2022 is estimated at 4.8%, in 2023 — an increase of 0.8%.
Real incomes will decrease in 2022 by 6.8%, then they will recover.
The analysis of the updated forecast shows that the Ministry of Economy believes that, in general, the recession of the Russian economy will be less deep and quick, and the recovery will be slower.
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