Page 27 - Russia OUTLOOK 2024

• 2.1 GDP Economic overview
Russia’s economy rebounded in the second half of 2023 and was set to finish the year with at least 2.2% growth, while most of Europe’s leading economies are going into recession. However, as the year drew to an end many analysts were revising their end of year forecasts again, with 3-3.5% also possible.
Analysts have considerably improved the GDP forecast for 2023 to +3.1% (+0.6 p.p.), according to the CBR’s December macroeconomic survey. The forecast for 2024 has been revised downwards by 0.2 p.p. to 1.3%. The forecasts for the following years and the estimate of the long-term GDP growth rate are unchanged at +1.5% per annum. According to analysts, the change in GDP in 2026 to the 2021 level will be +5.3% (up from +4.9% according to the October survey).
The outlook for 2024 is less good, with everyone forecasting a slowdown to somewhere between 1.2-1.6% and something similar in 2025, as the effects of persistently high inflation and the high interest rates take their toll.
The Bank of Russia’s monetary policy pursued will create the conditions for returning the economy to the balanced growth path. In its baseline scenario, the Bank of Russia forecasts that the GDP growth rate will be 1.5-2.5% in 2023, 0.5-1.5% in 2024, 1.0-2.0% in 2025 and 1.5-2.5% in 2026.
Growth in the coming years is expected to continue to be driven by domestic demand but is set to decelerate as capacity bottlenecks kick in. Various surveys suggest that by mid-2024, companies will face labour and skill shortages, which will also be a drag on growth.
Although the tight labour market is expected to support wage growth, household consumption is set to decelerate, as high interest rates and
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