The Minutes of the Academic Council meeting dated 24.01.2023
The fourth meeting of the Academic Council was held on January 24, 2023 by webinar.
The meeting was devoted to the topic “Risks and opportunities for the Russian economy development under foreign economic restrictions”. A.A. Shirov, Corresponding Member of the Russian Academy of Sciences, Doctor of Economic Sciences, Director of the RAS Institute of National Economic Forecasting, delivered a report.
The speaker noted that the long‑term trade surplus, multi‑level reserve provision, and the ability to replace gaps in production chains with imports — in other words, the mechanisms that underpinned the development of the Russian economy — have ceased to function in their previous form. Questions are arising regarding the revision of pricing principles and approaches to forming the state budget. Export parity, which ensured faster price growth for intermediate products, poses serious barriers to effective economic modernization. The policy of restraining prices for intermediate products through various tools is becoming one of the important conditions for normal development. There is a question about the restoration of production chains based on import substitution. Financing the structural and technological modernization of the economy, which is necessary, requires an increase in government spending, which objectively leads to a budget deficit.
Among the main development trends in 2023, the speaker noted:
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the postponement of a number of negative consequences of the crisis until 2023;
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the tightening of sanctions pressure;
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the normalization of the payments balance;
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an increase in the budget deficit and a reduction in the countercyclical function of government spending;
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negative investment dynamics;
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the realization of pent‑up consumer demand. This is clearly a positive factor. It mainly concerns the population group with high incomes, especially in the event of relative macroeconomic stabilization;
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balancing supply and demand (there is a potential for growth in those areas where such balancing takes place);
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price stabilization.
In general, there are signs of a slowdown in the global economy (a slowdown in the growth of commodity prices; an increase in the share of energy prices in the global GDP structure to levels above safe levels). In some countries, a strong slowdown or recession can be expected in certain periods, but on a global scale, a strong slowdown cannot be expected. There will be a process of expanding regionalization. It is possible to form new growth centers – Africa, Latin America. America, partly the Middle East.
The slowdown in global economic growth and lower growth rates in global exports are creating problems for us and require more intensive integration into trade and economic relations that could serve as an alternative to the Western‑led framework, the speaker emphasized.
The key feature of the current crisis in Russia is that it will be the longest in history since the early 1990s. GDP is not expected to return to positive territory before Q3–Q4 of 2023. The longer the economic downturn, the more difficult it is to mitigate its consequences.
The speaker particularly emphasized that the pricing principles that hindered economic development before the crisis continue to be in effect in the current period. This, among other things, contributes to the preservation of a primitive consumption basket.
In 2023, GDP in Russia is expected to contract by 1.7%. In 2024–2025, growth is expected to be 1.5% and 2%, respectively. The key drivers of economic growth at this stage are exports and investment.
If the global economy develops according to a scenario in which the measures announced by countries regarding climate regulation are not fully implemented (which is more likely), then Russia can be expected to return to pre‑crisis levels in terms of oil export volumes in 2026–2028, and in terms of gas — up to 2035.