ALEXEY VEDEV: “IN THE NEXT FEW YEARS INFLATION WILL STABILIZE AND THE DOLLAR EXCHANGE RATE WILL NOT CHANGE MUCH”
Alexey Vedev, Doctor of Economic Sciences, Head of Financial Studies Department at the Gaidar Institute, told the information newspaper “Metro Moskva” what Russian economy may expect in the coming 3 years.
Last week, Alexey Vedev presented a forecast of Russia's socio-economic development in 2023-2025 at the Russian Academy of Sciences. He believes that economic storm that swept the national economy after the imposition of sanctions in the spring of 2022 is already on the decline.
The Russian economy may contract by 3.5% in 2023, grow by more than 2% next year and grow by almost 2% in 2025, the expert forecasts. According to Alexey Vedev's forecast, a 3.5% drop in the economy is the worst-case scenario and is only possible if the Russian oil price is at $40 per barrel, if the domestic financial authorities fail to balance the budget deficit, and if there is a skew in foreign trade. Under an optimistic scenario, the Russian economy would decline by only 1% (if the above-mentioned problems are solved).
As for inflation, if in 2022 it was 11,94%, in the current year it will be possible to curb it in the corridor of 5 to 7%. However, in 2024, price growth will reach 4%. Such a low inflation rate can be achieved by reducing consumer demand and stabilizing the exchange rate.
As for dollar behavior in 2023, it is expected to be in the corridor of Rb75.8 to 80.4. In 2024, it may cost from Rb73.5 to Rb77.9 and in 2025 in the range from Rb72.6 to Rb74.2. Alexey Vedev says that ruble will be strengthened in three years due to the rise in the price of Russian oil and the reduction of its discount.
The Urals oil in 2022 will cost on average about $76 per barrel. This year, its value is projected at $40-70 per barrel, in 2024 in the corridor from $50 to 60 and in 2025 a barrel of black gold will cost $60.
As for exports and its oil to gas ratio, in 2022 Russia sent abroad goods for a total of $585 b, while oil, gas and petroleum products were sold for $338 bn, i.e. the share of oil and gas exports was 57.7%. Alexey Vedev explained that there will be a reorientation of Russian exports towards non-resource exports. The IT and manufacturing sectors of the economy will strengthen. The government's measures in terms of taxation and support for non-resource exports will produce results, the economist said. In 2025, total exports will drop to $455 bn with oil and gas exports accounting for $212 bn or 46.5% of exports.