Russian macro 2023: Feels like an ordinary year
Rosstat’s recent revisions of the national accounts for 2021 and 2022 suggest that the Russian economy performed somewhat better in those years than previously estimated. As the quarterly GDP statistics were revised accordingly, it looks as though the current growth trends appear more positive than seen before. Even though there has not yet been an official flash estimate for 2023 GDP growth, and the 4Q23 data are not yet available, the monthly statistics for October and December continued to point to relatively stable GDP growth last quarter. In 2023, as a whole, GDP may have grown by about 3.4% or even higher—given that it grew by 3.0% y-o-y in 9M23. If so, then 2024 economic growth should look better (assuming other factors are equal), and GDP may expand even faster than in 2023.
Last year looked like a rather usual year at a glance—a decent rate of economic growth amid a moderate budget deficit and a reasonably strong current account surplus. Quarterly exports and imports remained stable, and the services and income balances remained moderately negative. Hence, the balance of payments appeared unshaken, and one could see no significant changes on an aggregate level.
Overall, businesses all across the economy continue to adjust to the new realities. What supported this process was a rather moderate budgetary policy—it looked neither too populist nor too tight. As revenues exceeded previously targeted budgetary plans, the government amended expenditures but kept the federal budget deficit low and easily manageable. The weaker ruble helped to collect more oil-and-gas taxes and VAT on imported goods. Overall, the share of oil-and-gas taxes in the federal budget declined, which means that not only did businesses become less vulnerable to external shocks (having adjusted to a new means to do foreign trade transactions by increasingly relying on CNY), but the budget also became less dependent on external factors.
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