Medvedev says Russian economy will not collapse
Deputy Chairman of the Russian Security Council Dmitry Medvedev stressed that the Russian economy will not collapse as the West wants.
In remarks to the press, Medvedev noted that Russia will be able to develop the industry and punch big “holes” in the Iron Curtain, according to Russia Today.
Russia expects the economy to contract by 8.8% in 2022 in the baseline scenario, or 12.4% in a more conservative scenario, a document released by the Russian Ministry of Health showed on Wednesday. ‘Economy, further evidence that sanctions pressures are casting a shadow.
The conservative outlook is in line with that of former finance minister Alexei Kudrin, who said earlier this month that the economy was on course to contract more than 10% this year in its biggest drop ever. gross domestic product since 1994.
“The document showed that the Russian Ministry of Economy expects the economy to grow by 1.3% in 2023, 4.6% in 2024 and 2.8% in 2025. In a scenario conservative, the economy is expected to contract by 1.1%. The extent of the damage to the economy this year is unclear due to uncertainty over potential new sanctions and trade issues,” he said.
The government is likely to revise the forecast several times this year.
The document showed that inflation, which already hit 17.62% as of April 15, was expected to accelerate to 22.6% this year, remaining well above the central bank’s 4% target in 2023.
The central bank raised interest rates to 20% from 9.5% at the end of February in an emergency measure, which Governor Elvira Nabiullina said helped stabilize the ruble and tackle rising currency. inflation.
The bank’s key interest rate was lowered to 17% on April 8 in another unforeseen move. Analysts polled by Reuters now expect interest rates to fall another 200 basis points to 15% at the Bank’s next rate-setting meeting on Friday.
Capital investment is expected to fall 25.4-31.8% after growing 7.7% in 2021, while real disposable income, a very sensitive metric for Russia, especially with price increases that affect living standards, could drop 9.7% in 2022, according to the State Department.
The World Bank has forecast that Russia’s GDP for 2022 will fall by 11.2% due to Western sanctions imposed on Russian banks, state-owned companies and other institutions.