Russia’s economy will contract by less than 3% in 2022

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Russia’s economy will contract by less than 3% this year, as the strength of the labor market has helped mitigate the impact on the economy of the conflict in Ukraine, First Deputy Prime Minister Andrei Belousov said on Monday, writes Reuters.

In 2022, Russia’s GDP will decrease by “slightly over 2%”, and in 2023 “by 1% at most”, Belousov predicted. Some economists predict a decline in the Russian economy of 15% in 2022, in the context of Western sanctions imposed following the invasion of Ukraine.

According to the estimates of the International Monetary Fund, Russia will register a decline in GDP of 6% in 2022 (compared to the decrease of 8.5% predicted in April), while next year the economy should contract by 3.5% (compared to a previously estimated level of 4.7%).

Also, Belousov declared that the inflation rate will be 12%-13% in 2022, below previous estimates, following the evolution of the economy beyond expectations.

Imports of consumer goods have largely recovered, thanks to parallel import schemes designed to replace Western goods of firms that have withdrawn from the Russian market, the official added.