GDP down by a mere 2.1% in 2022

RUSSIA ECONOMICS - In Brief 21 Feb 2023 by Alexander Kudrin

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Rosstat reported that Russian nominal GDP reached R151.5 trln in 2022 (over $2.2 bn). In real terms it contracted by 2.1% while in dollar terms it grew significantly as high inflation inflated the nominal GDP number, and the ruble appreciated against the dollar in average annual terms. It is not yet clear how GDP performed by quarters as quarterly national accounts for 2021-22 do not match recently revised annual statistics. Note that previously Rosstat also revised annual 2021 GDP, having upgraded its growth to 5.6%. Quarterly national accounts matching the recently published annual statistics will be published in April. Most likely, these revisions will be accompanied by the revision of some monthly statistics, such as retail sales, agricultural output, construction activity, etc. Still, if one sticks to the available quarterly GDP data, one can estimate that in 4Q22, Russian GDP contracted y-o-y less than in 3Q22 (by about 3.2%). According to Rosstat, investment in production capacity grew in 2022 by 5.2%, while household contraction shrank by a mere 1.8%, which is far less than was the contraction of retail sales. At a glance, the difference might have stemmed from positive growth in paid services, which already grew as a percentage to GDP in 2021. Government consumption increased in 2022 and softened negative GDP dynamics. This publication on 2022 GDP deserves some additional consideration in order to understand better its implication for 2023 growth. We are going to add more color to this issue in the near future.  Evgeny Gavrilenkov Alexander Kudrin