Sergey Drobyshevsky on the 2024 results released by Rosstat

Sergey Drobyshevsky, Principal Researcher at the Gaidar Institute commented on the main macroeconomic indicators’ data for the past year published in the «Socio-Economic Situation of the Russian Federation»:

On February 7, Rosstat published the results of 2024. On the one hand, they were quite expected. On the other hand, there were a few unusual things in the released data.

Firstly, there was a revision of the GDP data for 2023: Rosstat raised the estimate to 4.1%, equaling it with 2024. This is a good ratio, which points to a high rate of economic growth. At the same time, it provides us with new information to assess the period in which the so-called overheating of the economy was observed. It turns out that the economy grew faster than the long-term average. And, accordingly, this could affect the rate of inflation, the policy of the Central Bank, and the decisions in the field of monetary and budgetary policies. It is because in 2024, overheating of the economy is a universally recognized thing. Owing to this, monetary conditions have tightened to a large extent.

Another unexpected moment is the results of 2024 in terms of inflation, which in recent months has turned out to be higher than the forecasts for November-December 2024. The inflation rate increased to 9.5% from 7.4% by the end of 2023. It seems that growth in consumer spending and budget spending in December 2024 had their impact. We hope that the Central Bank’s tough policy and its decision on the key rate, which is going to be made just in a few days, will be sufficient enough for the inflation rate to start declining and then embark on the trajectory towards the target.

Thirdly, I would like to note the results of the year in terms of the consumer market and households’ real incomes. Households’ real consumption growth was equal to 7.2%, which is a very high ratio. Despite a slight slowdown at the end of the year, the December data turned out to be good, and year-end growth was high. Households’ real income increased by 7.3%, which is slightly lower than growth in real wages. However, owing to growth in budget-funded salaries and interest income on deposits we can see that households’ income level is still growing.

Tuesday, 11.02.2025