While in the United States the official definition of a recession is debated and whether a drop in GDP accompanied by a strong job market is considered a recession or not, in Russia we are already in a full recession by any possible definition.
The export-biased and import-dependent Russian economy continues to vigorously export energy products in the billions, but oil cannot be eaten and neither can rubles. As far as all other areas of life are concerned, Russia is very dependent on external producers for the import of raw materials as well as finished products in all areas of life, and here the Western sanctions are definitely hitting a weak point, although it does not seem that they will be able to force Putin to change his policy as hoped in the Western countries.
According to the Central Bank of Russia, the Russian GDP is expected to shrink by 7% in the third quarter after it contracted by 4.3% in the second quarter. The bank estimates that in the second half of 2023 the economy will begin to recover from the crisis: “According to the updated forecast of the Central Bank of Russia, the contraction in the economy will be less deep than we anticipated in April. At the same time, the effect of the damage to the supply may be longer,” the bank said.
In a broader view, according to the current assessment, the economy is expected to contract in the entire year 2022 at a rate of between 4% and 6%. In 2023 the rate of decrease in GDP will be 1% to 4% and in 2024 Russia hopes to return to growth of between 1.5% and 2.5%.
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