Page 119 - RusRPTAug24

5.2.1 Import/export dynamics
The share of imports in Russia’s economy has fallen to 17% from around 22% pre-war, ahead of a schedule set earlier this year by Russian President Vladimir Putin as part of his May decree economic blueprint.
According to the decree, the government must decrease the share of foreign products in GDP from 18.7% in 2023 to 17% by 2030. However, this target may be met as early as this year, says analysts interviewed by Vedomosti.
Russian President Vladimir Putin’s decree on June 7 aimed to reduce the share of imports in GDP from 19% to 17%. Speaking at the SPIEF, the president said, "The share of imports should be reduced, of course, not through administrative, protective barriers, but thanks to our own competitive production."
While reducing Russia’s dependency on imported technology and machinery is an important goal for the Kremlin, not all the fall is due to import substitution, but partly due to payment problems Russian firms have thanks to the US strangulation sanctions introduced in December that affect banks.
According to the Central Bank's estimates, imports of goods and services amounted to $174.7bn in the first half of 2024. This figure is 7.4% lower than the previous year, while GDP is anticipated to grow by over 3% by year-end, a projection given in June by Maxim Oreshkin, Deputy Chief of Staff of the Presidential Executive Office.
The Ministry of Economic Development's April forecast predicted a real GDP growth of 2.8%, with nominal GDP projected at RUB191 trillion, or over $2 trillion at an exchange rate of RUB94.7 rubles per dollar. Currently, the national currency stands stronger at RUB87.6 rubles per dollar.
"If imports fall to 17%, this will be the second goal set by the president that has been achieved ahead of schedule," Dmitry Kulikov, Director of the Sovereign and Regional Ratings Group at ACRA reports Vedomosti. Kulikov highlighted that until 2022, Russia had an import share in GDP of 20-21%, which dropped to 13-15% at the peak of the crisis. He noted that while there are long-term prerequisites for reducing import shares, two factors inhibit a rapid reduction: improving citizen well-being and enhancing enterprise production capabilities.
As Russia has never developed its own precision tools manufacturing sector it remains heavily dependent on the import of machines, which account for about half of all imports.
Three scenarios are emerging for 2024 concerning cross-border payment
119 RUSSIA Country Report August 2024 www.intellinews.com