Inflation and new sanctions: what will happen to the Russian economy in 2022
Experts' forecast: what will happen to prices in Russia next year
The Russian economy in the last two years has been attacked not only by Western sanctions, but also by coronavirus infection.
Scientists suggest that the situation with the pandemic is beginning to gradually improve, and in this regard, the economies of all developing countries should also catch up during this time. Everyone is waiting for the onset of stabilization from the coming 2022. Financiers predict the onset of normalization, and GDP is likely to decline, but fiscal policy will become more stable. In 2022, it is assumed that there are extremely many risks, first of all, there is a high probability of encountering high inflation. Also, problems in geopolitics and the application of new sanctions should not be ruled out.
Bloomberg experts assure that in 2022 the growth of the Russian economy is likely to slow down. In 2021, it was fixed at 4.2%, but we should expect a decrease to 2.5%. And this is quite expected, according to surveys of thirty economists working in various fields of activity conducted by the agency in December last year.
Other experts call a more pessimistic scenario. For example, Natalia Orlova, an economist at Alfa-Bank, believes that the growth rate will not exceed 1.5%. She calls the economic situation, which is likely to arise in Russia in 2022, "strong financial volatility." This, in tandem with the expected geopolitical processes, will negatively affect economic growth.
The Ministry of Economic Development also provides its official economic forecast for 2022. Its experts believe that GDP growth will be at least 3%, and this indicator will be maintained until the end of 2023. However, independent experts do not support such an optimistic forecast.
Will the Russian economy normalize in 2022?
At the end of 2021, a recovery peak was recorded after two years of the pandemic. The natural process after this phase is the normalization of global economic growth. VTB Capital emphasizes that the slowdown in the global economy is quite normal, while it continues to grow. In 2022, there is no need to expect jumps, this is a period of normalization and stabilization.
All over the world, they are waiting for the key components of the economy - GDP, budget, the level of interest rates, the exchange rate - to normalize. Russia is no exception, it is developing in a common spectrum with all world states.
"Normalization" is a likely scenario for Russia, a country with a federal budget, since it is in principle manageable. Russian Finance Minister Anton Siluanov has repeatedly stressed that from 2022 the budget will return to the usual budget rules.
How will the coronavirus affect the Russian economy in 2022?
Experts claim that 2021 was more stable in economic terms than the previous 2020. The recovery process was especially noticeable in the second quarter, when the restrictions associated with the activation of the coronavirus in the country were lifted as much as possible. Experts of the international institute assure that GDP growth in 2022 will be 2.4%, and in 2023 it will slow down to 1.8%.
Anti-coronavirus restrictions will act as a hindering factor, as they did last year. It is also worth paying attention to the low rates of vaccination of the population, because they will provoke the introduction of new restrictions for a much longer period.
However, expert Osmolovskaya-Suslina assures that the pandemic should not be underestimated. Forecasts may turn out to be incorrect due to the appearance of new strains, no one can give such guarantees. It is not necessary to say with confidence that the state has already reached the post-pandemic level of development.
What will inflation be like in 2022: experts' forecast
In the past 2021, the growth of inflation turned out to be too aggressive and was fixed at the level of 8.4%. It was not possible to stop the acceleration, and traditional seasonal factors did not change the situation either. Some measures were provided by the Bank of Russia, but the doubling of the key rate did not bring the proper result.
Regarding inflation in 2022, experts' opinions are divided. VTB Capital experts assure that there will be a slowdown to 4.7%. And Bloomberg made a forecast at the end of 2021 and believes that inflation will not fall below 5.8%. Alfa-Bank specialists call their forecast, according to it, inflation in Russia in the new year will be at the level of 6%, but growth is possible in the second half of the year.
The Ministry of Economic Development emphasizes that the risk of inflation is extremely difficult to control, especially in modern pandemic conditions. It is also worth considering external factors. But the department is confident that inflation will not rise above 4.2%.
How will the new Western sanctions affect the Russian economy
Experts say that additional sanctions may be a critical factor that will affect economic growth. Raiffeisenbank macroanalyst Stanislav Murashov sees the main danger for the Russian economy in geopolitical processes. "The risks are associated with the escalation of the conflict in Ukraine, tension in relations with the United States," he says.
Recall that the world community started talking about new sanctions at the end of 2021. This was due to the situation in Ukraine. The US and EU representatives reported that they are ready to provide a new package of economic restrictions for a number of Russian citizens if the Russian Federation openly starts a war against Ukraine.
Disconnection from the SWIFT global payment system can also be used as sanctions. Such a scenario will be extremely unfavorable for the Russian economy, but analysts believe that the world community will not resort to such drastic measures.
What will prices increase in Russia in 2022
During the waiting period for a new wave of coronavirus, prices for goods that are associated with a "new way of life" will continue to rise, according to Valery Mironov, deputy director of the HSE Development Center Institute. To them he attributed building materials that will be used for finishing houses in the suburbs, household appliances, computer and digital equipment and cars. These are the goods that will allow you to take shelter at home or in the country during a pandemic.
Also, the economist did not rule out an increase in real estate prices. In particular, people with high incomes will buy second and third homes as an investment asset, Ura reports.
Delivery is another sign of a "new way of life". The development of this market is another factor of an extremely strong and global impact on prices in Russia and around the world, says Nikolay Novoselov, Director of Development at Cuore Commercial and Industrial Company.
Scientists suggest that the situation with the pandemic is beginning to gradually improve, and in this regard, the economies of all developing countries should also catch up during this time. Everyone is waiting for the onset of stabilization from the coming 2022. Financiers predict the onset of normalization, and GDP is likely to decline, but fiscal policy will become more stable. In 2022, it is assumed that there are extremely many risks, first of all, there is a high probability of encountering high inflation. Also, problems in geopolitics and the application of new sanctions should not be ruled out.
Bloomberg experts assure that in 2022 the growth of the Russian economy is likely to slow down. In 2021, it was fixed at 4.2%, but we should expect a decrease to 2.5%. And this is quite expected, according to surveys of thirty economists working in various fields of activity conducted by the agency in December last year.
Other experts call a more pessimistic scenario. For example, Natalia Orlova, an economist at Alfa-Bank, believes that the growth rate will not exceed 1.5%. She calls the economic situation, which is likely to arise in Russia in 2022, "strong financial volatility." This, in tandem with the expected geopolitical processes, will negatively affect economic growth.
The Ministry of Economic Development also provides its official economic forecast for 2022. Its experts believe that GDP growth will be at least 3%, and this indicator will be maintained until the end of 2023. However, independent experts do not support such an optimistic forecast.
Will the Russian economy normalize in 2022?
At the end of 2021, a recovery peak was recorded after two years of the pandemic. The natural process after this phase is the normalization of global economic growth. VTB Capital emphasizes that the slowdown in the global economy is quite normal, while it continues to grow. In 2022, there is no need to expect jumps, this is a period of normalization and stabilization.
All over the world, they are waiting for the key components of the economy - GDP, budget, the level of interest rates, the exchange rate - to normalize. Russia is no exception, it is developing in a common spectrum with all world states.
"Normalization" is a likely scenario for Russia, a country with a federal budget, since it is in principle manageable. Russian Finance Minister Anton Siluanov has repeatedly stressed that from 2022 the budget will return to the usual budget rules.
How will the coronavirus affect the Russian economy in 2022?
Experts claim that 2021 was more stable in economic terms than the previous 2020. The recovery process was especially noticeable in the second quarter, when the restrictions associated with the activation of the coronavirus in the country were lifted as much as possible. Experts of the international institute assure that GDP growth in 2022 will be 2.4%, and in 2023 it will slow down to 1.8%.
Anti-coronavirus restrictions will act as a hindering factor, as they did last year. It is also worth paying attention to the low rates of vaccination of the population, because they will provoke the introduction of new restrictions for a much longer period.
However, expert Osmolovskaya-Suslina assures that the pandemic should not be underestimated. Forecasts may turn out to be incorrect due to the appearance of new strains, no one can give such guarantees. It is not necessary to say with confidence that the state has already reached the post-pandemic level of development.
What will inflation be like in 2022: experts' forecast
In the past 2021, the growth of inflation turned out to be too aggressive and was fixed at the level of 8.4%. It was not possible to stop the acceleration, and traditional seasonal factors did not change the situation either. Some measures were provided by the Bank of Russia, but the doubling of the key rate did not bring the proper result.
Regarding inflation in 2022, experts' opinions are divided. VTB Capital experts assure that there will be a slowdown to 4.7%. And Bloomberg made a forecast at the end of 2021 and believes that inflation will not fall below 5.8%. Alfa-Bank specialists call their forecast, according to it, inflation in Russia in the new year will be at the level of 6%, but growth is possible in the second half of the year.
The Ministry of Economic Development emphasizes that the risk of inflation is extremely difficult to control, especially in modern pandemic conditions. It is also worth considering external factors. But the department is confident that inflation will not rise above 4.2%.
How will the new Western sanctions affect the Russian economy
Experts say that additional sanctions may be a critical factor that will affect economic growth. Raiffeisenbank macroanalyst Stanislav Murashov sees the main danger for the Russian economy in geopolitical processes. "The risks are associated with the escalation of the conflict in Ukraine, tension in relations with the United States," he says.
Recall that the world community started talking about new sanctions at the end of 2021. This was due to the situation in Ukraine. The US and EU representatives reported that they are ready to provide a new package of economic restrictions for a number of Russian citizens if the Russian Federation openly starts a war against Ukraine.
Disconnection from the SWIFT global payment system can also be used as sanctions. Such a scenario will be extremely unfavorable for the Russian economy, but analysts believe that the world community will not resort to such drastic measures.
What will prices increase in Russia in 2022
During the waiting period for a new wave of coronavirus, prices for goods that are associated with a "new way of life" will continue to rise, according to Valery Mironov, deputy director of the HSE Development Center Institute. To them he attributed building materials that will be used for finishing houses in the suburbs, household appliances, computer and digital equipment and cars. These are the goods that will allow you to take shelter at home or in the country during a pandemic.
Also, the economist did not rule out an increase in real estate prices. In particular, people with high incomes will buy second and third homes as an investment asset, Ura reports.
Delivery is another sign of a "new way of life". The development of this market is another factor of an extremely strong and global impact on prices in Russia and around the world, says Nikolay Novoselov, Director of Development at Cuore Commercial and Industrial Company.
"The competition of delivery services is maximum and in some regions it turns into fierce competition with the taxi market for performers. Now both of these markets are gradually starting to become self-sufficient: bonus programs are being canceled, minimum checks for food delivery are being increased. In the near future, customers will start paying for the service that investors subsidized in 2020-2021," the analyst believes.
Novoselov advises citizens to test food delivery services right now if they postponed it for later. In the future, the cost of this service will increase not only due to competition, labor shortage, but also due to the rise in price of transport.
In particular, the car market may be affected by the global shortage of semiconductors. "There is a long investment cycle, huge investments that will last for a year or two. The rise in the cost of household appliances, cars, including related to this. This may continue next year," Mironov said.
At the same time, economists advise not to be afraid of a sharp rise in food prices. Prices for vegetables and fruits may rise on the eve of the season — last year's stocks are already running out, and new ones have not yet appeared in warehouses. Their cost will peak in the spring, Koltashov suggested. Mironov assumes that the market will take into account the lessons of this year and increase the production of fruit and vegetable products. "There are a lot of technologies in agriculture that can be put into operation. Any, including genetically modified products, although they are not in demand," the economist noted.
In particular, the car market may be affected by the global shortage of semiconductors. "There is a long investment cycle, huge investments that will last for a year or two. The rise in the cost of household appliances, cars, including related to this. This may continue next year," Mironov said.
At the same time, economists advise not to be afraid of a sharp rise in food prices. Prices for vegetables and fruits may rise on the eve of the season — last year's stocks are already running out, and new ones have not yet appeared in warehouses. Their cost will peak in the spring, Koltashov suggested. Mironov assumes that the market will take into account the lessons of this year and increase the production of fruit and vegetable products. "There are a lot of technologies in agriculture that can be put into operation. Any, including genetically modified products, although they are not in demand," the economist noted.
