The country’s GDP is now on track to decline by just 3% in 2022, versus the 7% projected earlier, Aleksey Kudrin said
Russia’s economic contraction is now expected to be much smaller than previously thought, according to Aleksey Kudrin, the head of the Accounts Chamber and former finance minister.
He told RT on the sidelines of the INTOSAI Congress on Thursday that “the situation is actually turning out better than originally thought.”
Kudrin explained that “the unprecedented sanctions that were introduced against Russia, of course, affect our economy, and initially it was predicted that GDP would fall by more than 7%. Nevertheless, now I think the decline will be only about 2.9-3.3%.”
He believes it will take two to three years for the country’s economy to return to pre-sanctions levels, though “it’s still difficult to make forecasts for the long term.”
Meanwhile, the former finance minister said that inflation would continue to slow and could drop to 4% in 2024. “Inflation is expected to be around 12% in 2022. In this regard, we are certainly seeing a big leap forward. The peak of this inflation was in April, when in annual terms it rose to almost 18%. However, now there is a steady decline.”
“In the meantime, the budget deficit may turn out to be higher than forecasts, but Russia has a margin of safety and resources to cover costs,” Kudrin suggested, adding that the “flexibility of the Russian economy is quite high.”
He also pointed out that many businesses have already managed to reorient to new sales or procurement markets, thus bypassing sanctions.
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