Russian macro: decent economic performance in 2022 to increase chances for growth in 2023
Rosstat reported that nominal Russian GDP reached R151.5 trln in 2022 (over $2.2 trln). It contracted by 2.1% in real terms but gained significantly in dollar terms as, on one hand, high inflation pushed up the nominal GDP figure by nearly 12%, and, on the other hand, the ruble appreciated against the dollar in average annual terms by about 8.4%. Last year was very peculiar and full of absurdity both in politics and, to some extent, economics. In both cases, these peculiarities stem from increased intervention by decision-makers worldwide, and the paradox is that the way to a more normal reality will require additional effort from respective decision-makers to gradually reduce the already accumulated distortions. The risk is that these actions by the same actors can do more harm.
It is not yet clear how GDP performed by quarter in 2022; the quarterly national accounts for 2021-2022 do not match the recently revised annual statistics because previously Rosstat also revised annual 2021 GDP, having upgraded its growth to 5.6%. The 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., which may change the current perception of economic reality.
However, if we stick to the available quarterly GDP data and ignore geopolitical risks, we can estimate that Russia's y-o-y GDP contraction was less in 4Q22 than in 3Q22 (by about 3.2% versus 3.7%). If so, then the starting point for 2023 GDP growth is good enough, and GDP may grow well above 1%, and possibly, close to 2%.
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