Russia facing harsher economic outlook for the rest of this year

The preliminary figures from Rosstat show Russian GDP contracted by 4 % y-o-y in the second quarter. Thanks to strong growth in the first quarter, however, GDP was down by just 0.4 % y-o-y in the first half. International research institutions and Russian forecasters all expect the Russian economy to shrink much further in the second half of this year.

Russian GDP forecasts have shifted somewhat in recent months, moving the time when the Russian economy hits bottom further into the future. Forecasters now expect a bit more modest economic decline this year and a bleaker outlook next year. Most forecasts put the contraction of the Russian GDP somewhere in the range of 5–8 % this year and 2–4 % next year. BOFIT’s updated Forecast for Russia comes out at the end of this month.

Russia’s booming current account surpluses are expected to continue both this year and next. The latest Consensus Economics survey of major forecasts finds an average current account surplus of 196 billion dollars this year and 124 billion dollars next year. The Central Bank of Russia expects the current account surplus to hit 243 billion dollars this year and 125 billion dollars next year. The CBR preliminarily puts the current account surplus for the first seven months of this year at 167 billion dollars.

Recent Russian GDP forecasts for 2022–2023 (change in volume of GDP)