Russian GDP Prospects Visualized (again)

Recent forecasts indicate 9.6% GDP y/y decline in 2022 (Bloomberg consensus, 3/25), or 15% (IIF, 3/10, via Reuters). S&P Global (3/22) forecasts 22% decline (q4/q4).

Figure 1: Russian GDP in billions Ch.2000Rubles (red), IMF January WEO forecast (red square), S&P Global forecast of 3/22 (light red square),  all on a log scale. Levels for 2021Q4, 2022Q4 calculated using growth rates. Source: OECD via FRED, IMF, S&P Global, and author’s calculations. 

This figure presents a much bleaker outlook than that discussed in this March 3 post.

42 thoughts on “Russian GDP Prospects Visualized (again)

  1. rsm

    So, do they just print money like the Fed did in 2020, and index like Turkey to fight inflation, while continuing the war as long as the insulated Putin feels like it?

  2. pgl

    I guess the Putin boom is over. Real GDP at the same level as it was 15 years ago is pretty bad.

  3. Ivan

    In real money that is about 10% of the US GDP. So the idea of exhausting their economy by an arms race, is not that unrealistic.

    We should also offer all their talented young people easy immigration into Europe and US. Why waste your talents hacking for Russia when you could come to Silicon Valley and become a tech multimillionaire. Winters are so much better in California. Drain their talent pool even more. Make them waste their GDP on things that don’t build their country. Finally let’s reduce their hydrocarbon income by switching to renewable and hydrogen much faster than we are doing right now. It’s a national security and personal independence issue at once – so we should be able to get the right and left to agree on it.

    Russia is a gas station with nukes. Let’s take away the gas station and force them to find a real job. They were offered a real role in this world and chose to become a hyper aggressive bully. Now they need a timeout until they decide to stop that and become a real contributor.

    1. Anonymous


      hyper-aggressive bully.

      and someone will buy that #3 energy supplier’s product at discount and not care about the west.

      1. baffling

        “and someone will buy that #3 energy supplier’s product at discount and not care about the west.”
        the only country who may do that is china. and i have my doubts about it in the long run. long term, china benefits more from world trade than it would for a few years of low cost oil and gas. especially as they are aggressively moving to electrification, so that they can get off of foreign dependence on oil and gas. china will get cut off from world trade if they import too much russian energy. they will maintain a fine balance, importing enough for their needs but cognizant of not importing enough to allow russia to strengthen. russia and china historically are more enemy than friend. china benefits from a weakened russian state, not a strong one. china is not concerned about russia as long as russia is consumed by nato on the western flank.

        1. Barkley Rosser


          India might so it also. As it is, there is a lmit to how much China can buy and resell as there is only one pipeline from the Russian oil fields to China.

          1. Moses Herzog

            If you are implying India can “win” from the war events, you are way off base. India’s import costs are near certain to rise, and really, already have. Supposedly they have a deal to buy 3 million barrels of Russian crude at a discount. Still, India could hardly be said to be “winners” and are probably already well aware they are walking on eggshells on that.

          2. Barkley Rosser


            I implied nothing of the sort. This is not a matter of India not being able to afford this. They can make money here, buying Russian oil at a discount and reselling it at the world price. But there is a serious limit to how much they can do this, probably more even than the limit I pointed out regarding China. What India can do with this is a pretty small deal, but they can do it.

          3. Moses Herzog

            @ Barkley Junior
            Where did you read India was going to “resell” Russian oil?? Wow, getting inventive in our septuagenarian years aren’t we?? You haven’t been swiping extra napkins and selling them outside Denny’s again have you??

          4. Barkley Rosser


            Yeah, India probably not reselling the extra oil they are reportedly buying from Russia. But they are making money for the simple reason that they are buying this oil are major discounts. This means they are substituting this cheap oil from Russia for more expensive oil they would have bought from other sources. That oil is available to the rest of the world. Indeed, the upshot is that the Russian oil is essentially entering the global market with downward pressure on global oil prices, and we have seen such downward pressure.

            India is the world’s third largest oil importer, a major player in the global market.

      2. Macroduck

        Letting people choose where to live is bullying? Now, invading a country which opts for democracy, that’s bullying.

        And the hyper-aggressive bit? Well, tanks or visas, which is more aggressive?

      3. Ivan

        “someone will buy that #3 energy supplier’s product at discount and not care about the west”

        Yes at least you got that right. Not sure if you understand that is actually the west’s plan. If Russian hydrocarbons were removed from the world export markets, the pain for the world economy would be very severe. However, if Russia is simply forced to sell at a deep discount, the pain will only be very severe for Russia.

        They have been forced to sell oil, already in tankers, for about $30. If going forward they were forced to sell their oil at half price or even just a $20-30 discount from market value, that would be a huge loss for them (at a time when their war efforts require a lot of money and their economy is falling into a hole right there with their currency).

        The initial increased price of oil will help force the conversion to alternative energy at a more rapid pace. That will make Russias hydrocarbon resources much less valuable in the future. So even the short term price we will pay is a long term strategic gain.

    2. pgl

      “Russia is a gas station with nukes.”

      I bet if Paul Krugman reads this line – he will want to adopt it as one of his own. NICE!

      1. Ivan

        The “gas station” part came is attributed to John McCain. Combining that with “with nukes” was from congressman Deny Heck (as far as I know he was first). But it is a very precise description of the economic and political basis for why anybody pay more attention to Russia than to any other country with a similar GDP.

      2. Barkley Rosser


        This line about Russia being a gas station with nukes has been around since at least 2019. My guess is that PK has already seen it.

          1. Barkley Rosser


            Indeed McCain started the gas station bit, but it took a few more years for somebody to add “the nukes.” But it did not happen yesterday.

    3. baffling

      the other side of the argument is what do you do with a hallowed out russia full of nukes and miserable people? if the people most likely to advocate for change leave, how do you get a nation to change? i guess that is how you end up with north korea.

  4. Ivan

    In 2008 with oil at $200 Russia had a conceptual choice, either give every Russian $1000 per year or give 150 Russians a billion per year. They made the wrong choice. Instead of using the next 2-3 decades of hydrocarbon riches to build a broad-based and sustainable consumer economy – they build a kleptocracy. The money flowed into Europe and the US for luxury jets, yachts and homes, rather than being used to build and sustain their domestic economy. So, when the oil and natural gas is done, Russia is done.

    You could think of the Russian people as victims and some of them are. But let’s not forget that Putin’s hyper-nationalistic and aggressive rhetoric has broad-based support in the population. The ideas of Russians as a sort of “uber-menchen” with a right to dominate other (lesser) people/countries didn’t take a lot of selling in Russia. Neither did the idea that Russia was some kind of “victim” for being denied that status. If anybody needs “denazification” Russia should look inside their own borders. Putin has had approval ratings in the 60-90% range since he got into power. He never had to hide who he was, he just had to advertise it.

    1. Barkley Rosser


      Of course Putin has spent way too much on his apparently worthless military, but your recommendation that Putin should have built a “broad-based and sustainable consumer economy” rather than continuing to produce oil and gas is easier said than done. Most people right now are thinking it is good for Russia to have all that oil and gas, and certainly Putin trying to use it as a weapon. But the hard fact is that in the longer term all that oil and gas has been bad for the Russian economy, which suffers from the “resource curse.”

      The main problem with having lots of oil and gas is that when it dominates exports it tends to push the value of a nation’s currency up and makes it hard for non-oil related manufactuing and other industries to compete with foreign firms and develop. Being hooked on oll and gas exports makes it hard for an economy to devellop other sectors. Not only that, but given how few people work in the oil and gas sector, the income earned in that sector tends not to get out to the population as large. Most major oil exporting nations end up being highly corrupt and authoritarian, although there are some exceptions, such as Norway. But it is easy for all the income to end up generating a corrupt klopetocracy that supports authoritarian rule that keeps the money flowing to them.

      An example of how it is really much better to have few narural resources is the Japanese economy, a manufacturing and exporting powrerhouse. It is able to keep the yen at a level that allows its highly productive industries to thrive.

      I note that wanting to diversify the Russian economy is something that has long been desired by the leaders of the economy going back into the Soviet period. This was a goal of the long term planners during the late Soviet period. But they understood how hard it is to get off oil once an economy has become addicted to exporting it, and modern Russia is still stuck on it.

      1. Ivan

        The fortress Russia idea was that everything Russia needed should be produced in Russia. The products they make don’t have to be competitive on the world markets, if they decide not to export or import final products. The export/import piece of GDP is usually rather small (unless you run a large surplus by shipping out raw materials). Yes their hydrocarbon export $ revenue had to be matched by purchasing a similar amount of assets and products to keep the exchange rates stable – but what if they had given everybody a new German car instead of giving a few people huge yachts and castles in Europe. Standards of living and consumer spending could have improved considerably that way.

        I do agree that the high incomes from natural resources are a curse more than a blessing. Even if the country avoid being taken over by ruthless sociopaths, it is hard to manage such wealth to the benefit of the people.

  5. SecondLook

    We should also offer all their talented young people easy immigration into Europe and US.

    Europe likely will, especially as they have a – I think excessive – worry about population decline.
    But for the new neo-populist party that has largely replaced the old GOP, Russians are considered socially undesirable; regardless of any contributions, they might make.

  6. w

    That’s not as bad a drop as I would expect. If the war gets really prolonged, I think the decline is likely to be greater because the total unavailability of particular items will cripple larger larger production – for instance vehicle and aircraft parts, machine parts, electronics.
    I don’t know if it will go all the way back to the Khrushchev years… but the other side of the picture is that Russia will also have to make a decision about whether to rebuild its military hardware. If the paranoid “west-is-out-to-get-us” attitude persists, then rebuilding what the Ukraine is destroying daily will crowd out other Russian spending for many years

  7. JohnH

    Mohamed El-Evian provides some balance by addressing the effects of the war in Ukraine on the West: “ the economic consequences of the war will not be confined to the countries fighting it. Already, the West has started to feel the “stagflationary” blowback. Existing inflationary pressures will be compounded by the surging prices of commodities, including energy and wheat. Meanwhile, another round of supply-chain disruptions has begun, and transportation costs are again increasing. Disrupted trade routes are likely to place further downward pressure on growth..”

    At least this is a start, broad brush as it is. If economists can estimate the impact on Russia, about which they know very little, they should be able to estimate the impact on the US economy, about which they claim to know a lot. Blowback goes far beyond the impact of rising oil prices, which has received some attention.

  8. Moses Herzog

    “The United States has already increased energy exports to Europe substantially. So far this year, nearly three-quarters of U.S. L.N.G. has gone to Europe, up from 34 percent for all of 2021. As prices for natural gas have soared in Europe, American companies have done everything they can to send more gas there. The Biden administration has helped by getting buyers in Asian countries like Japan and South Korea to forgo L.N.G. shipments so they could be sent to Europe.”

    No, it is not enough LNG. The point is, when you have better leadership in the White House, actions are taken relatively quickly.

    I made this comment about 7 months before Putin’s War, in late July 2021:

    If you look farther down in the same thread of late July, you’ll find commenter “pgl” labeled my comment on the Nord Stream 2 pipeline “unhinged”.
    Am I “tooting my own horn”?? You’re damned right I am, sure as hell no one else is going to.

    1. Barkley Rosser


      Did you actually read the rest of this thread you link to? It involves Menzie repeatedly taking you to task for making massively ignorant and idiotic comments? Yikes! You linked to this huge amount of you making a complete fool of yourself, one of the most intense denunciations of you ever by one of our hosts? Just how stupid are you, Moses? How much were you drinking before you provided this massively embarrassing link regarding yourself?

      1. Moses Herzog

        @ Barkley Junior
        I see the bottom portion of the thread where Menzie is making a pretty bad attempt at “CYA” or maybe “CMFBA” “Cover My Fraternal Brother’s A**”. Actually not a an uncommon thing between professors accept when you’re all fighting for the same tenured faculty position, in which case the machetes come out. I think it’s a great testimony to how much he likes you that a man as intelligent as Menzie will sit there for half a thread trying to tell me Quora is a site worth quoting. Nothing Menzie could ever do, aside from giving you his left kidney, could better testify to the man’s fondness for you.

        1. Barkley Rosser


          Oh my heavens, you are just going totally demented here. My one quote from Quora was of a completely accurate article about the population genetics of ethnic groups in the US, a matter on which you have made a total fool of yourself repeatedly. Thought you had figured out to leave this topic alone. But here you are again bringing it up yet again.

          Want to tell us how Putin has troops in South East Romania?

    2. pgl

      I was noting this:

      July 25, 2021 at 9:13 am
      The North Stream 2 issue has nothing to do with Germany’s gas supply and everything to do with Ukraine. That is why the competent Biden administration worked out a compromise that is about Ukraine and says nothing about German energy security. North Steam will not give Russia any substantial increase in sale of natural gas to EU it is just that more will be routed directly to Germany (so they will get it cheaper). The German supply will actually be more secure since it will not have to run through unstable countries like Ukraine.

      Now I have always agreed that we should find a way of shipping more LNG to Europe.

      1. Moses Herzog

        @ pgl
        “The North Stream 2 issue has nothing to do with Germany’s gas supply”

        Well, I will give you that’s par for the course as to what YOU would deem an “intelligent” comment. So praising that level of stupidity falls straight in line with your usual practices. You, our resident “trade expert”. When you’re not tag-teaming with Barkley in put-downs.

    3. Ulenspiegel

      Moses Herzof wrote back then: ” If Germany consumed roughly 95 billion cubic meters of gas in 2019, and Russia can deliver 55 billion cubic meters of natural gas through Nord Stream 2 in a single year, the prospect of Germany receiving 58% (55/95) of its natural gas supplies from Russia over multiple years is “no threat” to German or European security??”

      You still do not understand that the capacity of NS2 is physically not needed, NS1 + existing pipelines are sufficient. It was and is whether NG goes via Ukraine and Poland or not. Getting 50% of the NG from Russia is of course an issue, but that does not changes with NS2. Got it? It was a stupid stunt of former US goevernments to sabotage NS2.

      BTW: Has Russia reduced the long term deliveries?

      1. Moses Herzog

        @ UlenRussky
        Thank you UlenRussky for these insightful comments. I’ll try to answer your Russian query. Do you work for Ekho Moskvy?? Barkley Rosser needs to know where to find Ekho Moskvy’s latest “independent journalism”. I assume you’re a Senior Editor at Ekho Moskvy?? Barkley Rosser gets confused where Kharkiv is, without the Ekho Moskvy maps set in front of him. (He thinks Kharkiv is where Voronezh is located). Put that link up of yesterday’s best Ekho Moskvy stories would you??

        I’ll answer your question if you can answer mine. Why was the Nord Stream 2 pipeline recently cancelled??

        I’d ask Barkley Rosser about Nord Stream 2 pipeline, but without the “independent journalism” of Ekho Moskvy Barkley is totally lost on what’s going on in Russia right now. Barkley’s right, in times like this it’s hard to beat Ekho Moskvy. 1992 CNN’s Peter Arnett, eat your heart out. Ekho Moskvy is kicking A$$ and taking names.

        1. Barkley Rosser


          Oh good lord, more raving dementia here. Germany cancelled the Nord Stream 2 pipeline on Feb. 22 two days before the invasion happened.

          As for Ekho Moskvy, your apparent effort to somehow claim that it was not a largely independent radio station that has now been shut down by the Russian government because of that is just completely outrageous.

          You have been right on some points in all this, Moses, including believing the accurate forecasts by CIA that Putin would do the full scale invasion of Ukraine that has happened. But then you completely undermine yourself with this sort of just totally off-the-wall ranting. Yikes!

          1. Moses Herzog

            Those Ekho Moskvy journalists were “heroic” though weren’t they?? I’m kind of surprised that the Ekho Moskvy journalists didn’t team up with you and StinkyJerseyKopits to protect the USA embassy in Kyiv after the diplomats left. You know, ‘cuz you said they were “cowards” and stuff to move the USA embassy to Lviv. Since Kopits said he didn’t think Kyiv would be where the war action was that would have given you extra time to show the Ekho Moskvy “independent journalists” your skill at building card houses, then blow the card houses down with your septuagenarian lungs and said to the Ekho Moskvy “independent” journalists “See?? Kinda like you guys are.”

          2. Barkley Rosser


            This is even more demented and incoherent than any of your previous comments on this thread. What is it with you and Ekno Moskvy? Their people were in Moscow or Munich, not Kyiv. What on earth do they have to do with Kyiv, much less the US embassy there? This is utter irrelevant lunacy. You can mock them, but in fact the people who worked for E.M. face possible arrest and 15 years in jail. Your snarking at them is downright nauseating that makes a farce of your off and on self-righteousness you spout off in your ignorant discussions of all this.

            As for the US embassy, I note most nations kept their embassies in Kyiv. Only a handful of others joined the US in cutting and running like chickens to Lviv. My reason for us staying there was that I saw the Ukrainians having a good chance of preventing Kyiv conquered if Russia invaded, and that has come to pass.

        2. Ulenspiegel

          If you do not like to handle facts you can simply shut up. Your approach only tells us that you are not very bright.
          Suum cuique.

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