The decline in Russia’s GDP is expected to be much lower than previously thought, the country’s Economy Minister Maxim Reshetnikov said on Wednesday.
In an improved outlook, the ministry now sees the economy contracting by 2.9% this year and by 0.8% in 2023.
In August, the ministry projected a GDP decline of 4.2% in 2022, and 2.7% in 2023.
According to Reshetnikov, the economy is expected to expand by 2.6% in 2024-2025 due to robust domestic consumer and investment demand after falling this year and next, due to Western sanctions.
The minister added that the jobless rate is seen at 4.5% and inflation at 12.4% by the end of 2022. Disposable income of Russians is expected to decrease by 2% in 2022, but will grow by 2% as soon as next year.
The World Bank said in April that the Russian economy would contract as much as 11.2% in 2022.
Sanctions offer Russia ‘pleasant surprise’ – analysts
Reshetnikov stressed that emergency support measures taken by the government, along with rising energy prices after sanctions were introduced, have helped to stabilize the Russian economy.
Top government officials had previously said the economy was holding up better than expected in the face of Western sanctions.
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