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Russian analysts, gloomy scenarios on the Russian economy.


The Russian economy will, in all likelihood, follow a trajectory of inertia, which will lead to a new stagnation, Russian economists predict. But, in the event of an escalation of the military conflict in Ukraine, autarky is also possible, that is, a closed economy, at the expense of the well-being of the population.

All reasonable scenarios regarding the evolution of the Russian economy start from the idea that the sanctions will be maintained for at least 10-15 years, because, unlike the pandemic, the restrictions will not end soon, is the conclusion of the report prepared by a team of economists led by Dmitri Belousov, head of department at the Center for Macroeconomic Analysis in Moscow.

“Autarchy” (13% chance of achievement)

This scenario assumes that Russia “does everything by itself”, to the extent possible and at the price of a decline in the technological level, consumption, quality, performances of any kind, with a destructive negative effect on the population’s standard of living. The authors of the report, however, believe that, under the current conditions, it is unlikely that this scenario will work, but in the case of a new escalation of the conflict that basically opposes, in Ukraine, Russia and the civilized world, with the subsequent slide towards a “war economy” , he could become almost the only option.

“Institutional inertia” (47% chance of achievement)

In this scenario, the authorities recognize that the degree of instability of the economic and foreign policy situation is so high that it becomes impossible to apply a coherent development policy, because things will evolve at a higher speed than achieving a reasonable result. Therefore, all that can be done is to maintain macroeconomic and financial stability, ensure sustainable financing of budget commitments and implement the most stringent investment projects with precise deadlines.

In this scenario, after the recession of 2022-2023, investment is expected to grow by no more than 2.5% per year until 2030, which will not allow for an increase in labor productivity and real wages in either the commercial sector or in the public one. At the same time, the unemployment rate remains quite high – 5.5-6%, and the level of consumption of the population changes at the same rate as that of investments.

“The result of such a policy, in qualitatively new conditions, could be a prolonged stagnation, with economic dynamics of about 1.5% per year, with a gradually increasing gap in the field of technology, the level and quality of life and security nationals”, warns Belousov, quoted by dcnews.ro.

Moreover, he believes that, in this scenario, the gray sector of the economy will grow, attracting imports through informal channels and leading to the emergence of new groups of profitable entrepreneurs, following the model of the 1980s. This situation is capable of generating a social conflict between the elites ” old” and “new” (with a high probability of antisystem). In general, the standard of living of the population will stagnate and, given the lack of progress in infrastructure development, this may cause tensions in the regions.

“Struggle for growth” (40% chance of achievement)

This scenario (considered the target scenario) aims at efforts to modernize the Russian economy in a new environment, that is, a joint action of the authorities and the business environment, where the predominant role of the state will be balanced by the activity of private companies. This will prevent the “ossification” of politics and the dangerous stagnation of the economy and society. In addition, the scenario involves borrowing technology and entering available markets as actively as possible, while also trying to make some major country, such as China, a monopolistic external economic partner of Russia.

Such a development would allow fixed capital investments to grow at an annual rate of 3.5% or more, household incomes to increase, in turn, by 2.5-3.7% per year, at a rate of unemployment of 4.5-5%, a normal level for Russia.

“As a result, the economic growth rate will be able to reach 2.5-2.7% for the forecast period, which is almost in line with the pre-crisis projections (3%)”, according to the report taken by the daily RBK .