Economists estimate the country's GDP growth in 2024 at 0.8–1.6%

15:41, November 18, 2023

Leading RRFP speakers spoke about trends in the regions, economic drivers and expectations for the coming year

What are the structural changes in the country’s economy, how is the situation developing in the regions in the new economic conditions, how are regional budgets formed, how many grants and subsidies exist today, on what conditions does the Russian Federation build relations with China, how industry has adapted to sanctions - these and other issues were discussed participants of the main plenary session of the XVIII International Conference “Russian Regions in the Focus of Changes”.

“Population incomes are growing. In the first half of the year, growth was almost 4% across the country and almost 9% in the Sverdlovsk region. There are several reasons. First, the state’s social obligations have increased. Up to 1.5 trillion rubles are received monthly in the form of payments to low-income families with children. That's almost 10 million children. The second is a sharp increase in the salaries of certain groups of people: more than 300 thousand contract soldiers and 300 thousand mobilized workers receive a salary of 200 thousand rubles. This is money that these people have never seen before. And when the salaries of two categories of people rise sharply, this is significant. Third, starting from the fall of 2022, wages in the defense complex are growing rapidly. They have grown at least twice. Plus indexation of pensions. Further, due to the shortage of workers in the labor markets, a wage race began in all industries. This accelerated growth of wages contributes to the growth of real incomes of the population,” explains Natalya Zubarevich, a professor at Moscow State University, one of this year’s trends.

According to the expert, for the second year in a row the poverty level in the country has been reduced due to the redistribution of money: in 2022 and 2023, the incomes of lower-income groups of the population increase. The GDP will also grow, analysts believe.

“Colleagues say that the expected GDP growth in 2024 of 0.8% is an optimistic scenario. In this sense, our government is overly optimistic - they expect growth, if I remember correctly, of 2.3%. Our estimate is 1.6–1.8% of GDP. Because, firstly, the economy is inertial: if you accelerate, you cannot slow down quickly. Secondly, the drivers that exist this year will largely continue to work. Our estimate for 2023 is 3.3% GDP growth. Next year – 1.6%, then – about 2%,” explains VEB.RF chief economist Andrey Klepach.

Regarding 2023, experts had more pessimistic expectations, Andrey Klepach said. The results turned out to be better due to the drivers of the economy - construction, trade, real estate, mechanical engineering and chemistry. Thus, the growth rate of construction is record-breaking, the speaker added. In 2022, the contribution of construction to the country’s GDP was 9%; in 2023, at the current growth rate of construction, it will reach more than 7%. The specialist does not see oil and gas sales among the main drivers of the Russian economy.

“Data on oil and gas production is closed, but there are various materials and estimates by which we can say: production is declining. On the one hand, we have a failure in the export of pipeline gas, on the other, liquefied natural gas supplies are growing. But, if in 2018-2019 pipeline gas supplies to Europe reached more than 180 billion cubic meters, then this year, I think, there will be more than 40 billion cubic meters. And I believe they will not recover. Something will change, but the era of cheap Russian pipeline gas is over. Another thing is that Europe is worse off from this than us, but even when the policy changes, volumes will not recover. Large capacities have been created for the regasification of liquefied gas, which is delivered from the States and other countries. Plus, from 2025, especially from 2026-2027, quite large volumes of liquefied natural gas supplies from Qatar and other countries will enter the European market,” Andrey Klepach describes the situation.

In order to reorient to the east and increase the volume of gas supplies to China, it is necessary to lay a pipeline and come to an agreement with China, experts add. Negotiations are ongoing, but they will take time. At the same time, Russia is of interest to China more as a political than an economic partner, says Alexey Maslov, director of the Institute of Asian and African Studies at Moscow State University.

“Many changes are happening in China - positive and negative, and one of the problems in Russia is that Russian entrepreneurs do not know how to quickly track these changes, quickly use them and make a profit. That is, we are working with a certain lag,” says Alexey Maslov.

Electronic sales are actively developing in China; you can buy almost everything online: from hair dye to oil, the expert adds. The Chinese market is still large, but online.

“China has several fast-growing sectors that the Chinese State Council and energy agencies predict will grow in the near future. One way or another they are related to innovation, technology, and this is the problem that we have with China. China is an extremely innovative country. The number of startups in China last year alone was 76. In total, there are about 350-400 “unicorns” in China. All of them are in one way or another based around the main activities: tourism, food, biopharma, software, agro-industry, beauty and personal care. China prefers to cooperate in sectors that provide an obvious increase in innovation, and here we lose because we enter their market with raw materials. And in this regard, in these and other sectors, we are not significant partners,” explains Alexey Maslov.

It should be noted that the main plenary meeting was also attended by the chief economist of Alfa-Bank Natalia Orlova, the director of economic policy at the Higher School of Economics Yuri Simachev, Evgeny Gurariy, Assistant to the Plenipotentiary Envoy of the President of the Russian Federation in the Ural Federal District, the chairman of the board of directors of JSC PF SKB Kontur Dmitry Mramorov , director of GSEM  UrFU and Analytical Center "Expert" Dmitry Tolmachev, scientific director of the Higher School of Economics in St. Petersburg Sergei Vasiliev, member of the board of directors, independent director of JSC "Oil Insurance Company", ex-deputy chairman of the National Bank of the Republic of Kazakhstan Medet Sartbaev, Vice-Rector of the National Research University Higher School of Economics Sergey Roshchin. The event took place on November 17 and took place in the UrFU campus in the Novokoltsovsky district.