Russian economy contracted only 2.5% in 2022 despite invasion of Ukraine, according to Putin

The president of Russia, Vladimir Putinaffirmed today that the dynamics of the Russian economy in 2022 was better than many forecasts and that its contraction is expected to be of the order of 2.5%, when some predicted a drop in gross domestic product (GDP) of 20%.

“Our task is to maintain and strengthen this trend,” the Kremlin chief said at a meeting with the government’s economic bloc, the beginning of which was broadcast on the Rossia 24 state television channel.

He stressed that many important economic sectors, such as construction or agriculture, did not contract, but rather grew and created new jobs “despite unprecedented external pressure”alluding to Western sanctions for the Russian military campaign in Ukraine.

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The military industry, Putin added, has made a great contribution to the downstream industry sectors.

The Russian president stressed that despite Western sanctions, oil extraction in the country increased by approximately 2% in 2022, to 535 million tons or about 3.9 billion barrels.

He added that, although natural gas extractions last year fell by 11.8%, the country’s income from the export of that hydrocarbon increased.

“World prices, as you know, have risen due to the actions of Western countries, and Russian gas exporters have made huge profits in the last two years and have increased their payments to the country’s budget system.”Putin explained.

According to the president, last year budget revenues increased by 10% and totaled 27.8 trillion rubles or about 407.15 billion dollars.

“The federal budget deficit in 2022 was 3.3 trillion rubles (about $48.1 billion) or 2.3% of GDP,” Putin added, noting that this indicator is “one of the best” of the member countries of the G20.

He admitted, however, that in some regions of the country there are problems in reaching full employment and the level of wages is low.

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“The Government must work together with the federated entities to correct this situation,” said Putin, who stressed that the country has the resources for this.

He also drew attention to the problem of inflation and its impact on the income of the population.

In 2022, he added, inflation was 11.9%, slightly lower than forecast by the Central Bank (12-13%) and the Ministry of Economy (12.4%).

“This year we have to achieve tangible results in the increase in real wages”said the president, who anticipated that the first quarter could drop to 5% and the second, below 4%.

According to Putin, the achievement of this goal is “great importance both for the real income of the population and for the economy in general”.

Source: EFE