January 2023 Russian GDP Growth is -3.2% y/y

Year-on-year 2022 is -2.1%.

In “Russia’s economic contraction last year mitigated by government spending”, Bofit remarks on the y/y figure:

Looking again to the GDP by end use figures, private consumption contracted last year by 1.8 %, while public consumption rose by 2.8 %. The contraction in private consumption reflects the decline in real incomes (down by 1 % y-o-y). On the other hand, the contraction in retail sales (down by 6.7 %) suggests that the decline should have been more pronounced. We expect some of this confusion to resolve with the release of the 4Q22 figures. Last year’s nominal growth in public spending (over 20 % according to preliminary figures) was exceptionally high. It implies that public spending increased by nearly 10 % in real terms. Federal budget spending was up by 25 % y-o-y. Most of the increased government-sector spending showed up in public consumption and public investment.

In other words, in the absence of substantial increase in government spending, Russian GDP would’ve fallen a lot more.

I do wonder about the reliability of Rosstat numbers (reading between the lines, I suspect Bofit might as well).

Rosstat’s initial estimates of GDP by end use are difficult to interpret. Figures on the volume of total exports and imports are not released, and numbers inferred from other components imply about zero net exports last year. That estimate does not comport with available information on the value of foreign trade. Preliminary balance-of-payments figures indicate that the value of total imports contracted by 9 % y-o-y, while the value of total exports grew by 14 %. Using mirror statistics of Russia’s main trading partners, the value of Russian goods imports fell last year by 23 %, while the value of goods exports rose by 23 %.

The graph below presents some of the competing forecasts (OECD is from November, World Bank from early January, the IMF from end-January).

Source: European Council.

As of today, the IMF was closest, although with data revisions coming, this may change.

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