From BOFIT, revisions back several years, showing a sharper drop in Q2 (5.2% q/q vs original 1.9%).
Source: BOFIT (12/23/2022).
The drop in GDP in the two middle quarters of 2022 works out to a 9.6% annualized decline.
Are sanctions working? As of March 3, S&P Global predicted a 7% decline (q4/q4). If Russian GDP is flat in Q4, then the q4/q4 decline will be 12.7%, not far from the -13.9% July IMF World Economic Outlook Update forecast. The World Economic Outlook November forecast was for 7.6% decline (based on the pre-revision GDP estimates).
A summary of impacts based on WEO forecasts, from Nelson/CRS:
Source:R. Nelson, “The Economic Impact of Russia Sanctions,” CRS Issue Brief 12092 (Dec. 13, 2022).
Other recent discussion of sanctions impact on Russia from NPR, NYT.
While I’ve focused on the macroeconomic effect, recall the sanctions’ main objective is to degrade Russia’s will and ability to wage the war in Ukraine (e.g., see Department of State)
“Rosstat’s latest batch of economic figures show Russian GDP contracted by 3.7 % y-o-y in the third quarter. The preliminary estimate of 3Q drop in GDP was 4 %. With the new quarterly data and revision of older figures, path of the seasonally-adjusted quarterly GDP was altered considerably. Earlier figures had Russian GDP contracting in the second quarter by 1.9 % q-o-q. Now the 2Q drop was a stunning 5.2 %.”
That is quite the hit. Even more than the drop in real GDP back in 2015 (per your excellent graph). But have no fear – Jonny boy will deny this recent decline was anything to be concerned about just like he dismissed the 2015 decline because he had to claim Krugman had no clue what he was writing about back in 2014.
Here’s a random question for anyone who cares to answer. BOFIT seems to largely trust Rosstat numbers. Am I correct in stating this??~~and if BOFIT largely trusts the Rosstat numbers does that mean we should to??
BOFIT’s website notes:
‘As the basis for research and analysis, BOFIT uses statistical data produced by Russian and Chinese statistics authorities and international organisations.’
You already provided us with a paper on the reliability of the numbers from the Chinese government. I trust the numbers from the Russian government less. Of course I do not pretend to have a lick of expertise on this.
This might be considered old news in the sense the paper is 6 months old, but still gives some thoughts on RosStat and Russian economic data in general:
https://ssrn.com/abstract=4167193
Can anyone update if Elvira Nabiullina is still head of CBR?? I feel the obligation and duty bound to the professional integrity of Professor Rosser to ask, in case I missed anything over the news wires. I was thinking there might be a revision to the state of affairs since Professor Rosser’s “report” back in mid-August.
“I shall follow this up with the second English language report (the first I just put up on Econospeak in much greater detail, although crucial details remain unclear) that about last Tuesday, Russian central bank Head Elvira Naibiullina [sic] left office. This is all over various substantial Russian language sources, but not reported in English language media until I just did so a few minutes ago on Econospeak.”
…… “I wish her and her husband, who ceased being Rector of the Higher Economic School in Moscow last year, all the best. This now looks to be a dangerous situation for them.”
https://econbrowser.com/archives/2022/08/us-and-euro-area-headline-inflation-compared#comment-282275
This FT story seems to imply these 4 months later that Nabiullina is still alive, despite the “danger” to them. What a relief, aye??
https://www.ft.com/content/fe5fe0ed-e5d4-474e-bb5a-10c9657285d2
Moses Herzog: The slide deck summarizing the paper in question was subject of an Econbrowser post back in July.
Nabiullina is still head of CBR. Given how many top government and business leaders have been defenestrated in the past 8 months, I would worry about myself if I were the head of the CBR.
I had forgot about you already referencing the Yale paper, and I apologize for that.
Regards Nabiullina. So playing “if I was in Nabiullina’s shoes”, my honest take?? Putin is an extremely pragmatic man. And for the record, I don’t think he is mentally insane (by the clinical definition). I think he is fully aware no one in Russia can execute the “duties” (what Putin needs) of CBR Head better than Nabiullina. NOBODY in Russia can perform the job as well as she does. She is safe as long as that reality holds. Be there a day she refuses to do the job, or is unable to do it at the high level she currently does (age 59 this gives her at least 6 more years, Yellen is 76, we can argue Nabiullina could do the job 17 more years). I don’t think she has a hell of a lot to worry about, and arguably it’s conceivable she could outlast Putin in his job. Feel free to throw this comment back in my face if something “odd” (mortality wise) happens to her before the War in Ukraine ends. Save this permalink to throw in my face later. Multiple times even, if it humors you later.
Moses,
There is a further odd wiggle on this involving Yellen, with I know you have been reading the Hilsenrath bio of her, which I am also reading now, not anywhere near the end. A lot of interesting details in there, including as well about her husband Beorge Akerlof as well.
Here is the funny thing: there are also rumors Yellen wants out. She is frustrated with Biden on a number of policies,, includng that he and Pelosi and Schumer did not raise the debt ceiling before end of current Congress, which means she will have to deal with the Houae GOP loonies on this matter.
But yhen we have this irony, especially if both of these highly capable figures might be coming to the end of their policy careers, with indeed both of them professionally respecting each other, that they are now up against each other over the matter of economic sanctions against Russia over the wae in Ukraine, which I note rumors have it Nabiullina is not all that supportive of. In the US it is the Treasury Secretary, not the Fed Chair, who handles foreign exhange rate poolicy, and so Yellen has been the person charged with the effort to impose sanctions on Russia, with Nabiullina going up against her to try to minimize their impact. Few have actually noted this, but this has been a kind of showdown of the financial titans.
Something else about Nabiullina you may not know is that she resembles the late Madeliene Albright in using brooches for signaling, with I think she inspired by Albright in this. It really is a way of keeping the male chauvinist pigs around in line. They all end up hanging on “what brooch will she wear, and what does it mean?” I mean, heck, if you have to deal with VV Putin, you need something to keep him behaving himself.
Funny thing is my wife knew Albright as well as Nabiullina. Last time we saw her was in Dulles Airport where she was with David Ignatius. Marina spoke with Madelyn while I chatted with him.
Moses,
For what it is worth, since somehow you think this Nabiullina matter is something you can score points on against me because I reported on reports she might be out in August, only in the end not to have her out, is that if one looks carefully it seems that August, following some major defeats for Russia in Ukraine, was when the current slide in the rouble and also apparent worsening of some other parts of the economy began to take off. So, I have speculated there was some sort of conflict or power struggle at the time, and with the appearance of economic troubles that look to be beyond Nabiulllina’s ability to solve them.
Yes, she is still in office, but I have heard/seen nothing further on her status, other than reports of how indeed the central bank has “run out of tricks” to keep things all propped up. It could have been somebody blaming her, not that any of them would have been able to do any better. OTOH, I have speculated here before that it is not out of the question that she herself was behind the rumors because she wants out. We already know, and I remind you Moses, that Dr. Chinn has confirmed this, that she tried to resign in March, but Putin would not let her. What is going on with her is completely unclear, and, frankly, there may be reason to be at least a bit mildly concerned, although the economy has still not completely fallen apart, just kind of gradually doing so.
Oh yes, latest, and this is in the western social media at least it looks that there ate bank runs happening across Russia. I have seen videos of Russian screaming at ATM machines because there is no money in the bank. This is definitely under Nabiulllina’s purview, but what she can do about it ot is doing about it, I do not know.
One more point here, which involves my knowing some of the people involved in this contretemps around Nabiullina. It is seriously believed by some very inside people that she is against the war. That was a subtext of that March effort to resign. Again, I take the possibility she was behind these rumors in Auguin a renewedd effort to get out. She wanted out and opposed the war. She saved Putin’s behind earlier in the year, bur now, as she may well have forecast it maybe not directly to him, that the war would not go well. So when this clearly came to pass by August with alll these runs on reserves and declining rouble, she may well have made another effort to get the heck out.
I happen to agree with you, Moses, that she is highly competent and clearly Putin knows it, although how much criticism is he willing to tolerate even from highly competent people? Well, frankly, he has made a lot of bad decisions, his isolation a major reason for this as I warned about prior to him actually invading. Due to his isolation, Putin is not predictable. I really feel sorry for Nabiullina right now. She is in a very unpleasant situation now.
You say you got it right because she “asked to resign” (reality) vs “she got fired”. Tell me, if you are a weatherman, and said “Tomorrow we’ll have Summer temps” and the next day it was cold “Winter temps” you would say “See, I was right, because Summer temps “decided to Quit” G*Ddamn you are the dumbest PhD the world has ever seen/
3 words to earn respect for Barkley Rosser as a shit self-obsessed narcissist “I got it wrong” Try it. Or don’t, and be an ASS your ENTIRE life. I’ll File this under “I don’t care”
Moses,
I know you spend lots of hours digging around here to find things that you can accuse me of “being an ass” over for some reason or other. I know, you just gottadoit.
But on this matter I really do not see what point you think you are scoring. As Dr. Chinn noted, it is public information that Nabiullina tried to quit in March but was kept from doing so by Putin. Later in the year I reported on these rumors, whixh I thought I clearly identified as rumors that might not prove true, that she was going to be out, but then she was not.
Somehow now you seem to be making a big deal about specific wording of these rumors, but, Moses, do I need to remind you all this was in Russian so your efforts to parse some specific details of the wordinnngs in these rumors that somehow show that I am an “ass,” well, I am completwly mystified.
“Brother” Macroduck, as Moses’s supposedlhy closest buddy here, do you have any idea what this is about? Just what is the offense or crime that I have supposedly committed in any of my discussion of this matter? Dr. Chinn has already poked at him for making a fuss over this.
BTW, for any of you who do not know, New Years is by far the bigger holiday than Christmas, pretty much throughout the former Soviet Union, certainlhy in both Russia and Ukraine. It is s;novem godem (Happy new year) and everything will be closing down shortly for a couple of days. This is the Ded Moroz, or “Grandfather Frost” comes to give presents to children, who looks like Santa Claus. This is probably the biggest blowout holiday of the year.
Of course, it is also a time of serious reckoning. It is a very big disappointment for Putin that he has not taken Bakhmut ot anything else for nearly half a year, a serious bottom line. I am afraid that is why he unleashed the largest missile/drone attack on Ukrainian infrastructure yet. If he is embarrassed by his forces without any glory, well, those Ukrainians will have cold and lights out for their s’novem godem. Bah humbug.
Dr. Chinn did post this paper earlier but we should thank you for reminding us of it – as it seems the usual Putin poodles here must have never read it.
The hit on Russia’s economy isn’t big enough, no matter what it is.
-3.7% decline seems to be near the current consensus about Russia’s economic growth, And it’s remarkably different from forecasts six months ago that predicted -6-10%. And it’s a whole order of magnitude different from the forecast of the fellow who said last June that “The Russian economy is slated to shrink by 30% by the end of 2022.”
To put this in perspective -3.7% is the average decline for US recessions since 1945.
Oh gee – quoting someone unnamed person? And Jonny boy whines when someone quotes him as quoting Jonny boy is “misrepresentation”. But OK – Russia is facing its version of the Great Recession so no big deal. Damn – Putin needs better poodles as your defense of his war crimes are weak.
“To put this in perspective -3.7% is the average decline for US recessions since 1945.”
Jonny boy loves to make claims like this where he has not shown the data. Why? Because he can’t. If he provided the data, it would be another example of Jonny boy blatantly lying.
Come on little Jonny, use FRED to put US real GDP into an Excel file and show the declines in real GDP. You might notice this claim is not even close.
this is just the beginning John. the beatings will continue unabated. it will get worse and worse in Russia, as it should.
Who’s going to get beaten? Economists for their wildly bad forecasts? Or me for pointing it out?
You point what? Krugman got Russia right – you didn’t. Then again he tells the truth whereas you take great pride in being dishonest.
John, the young and intelligent are leaving Russia en masse. they understand the future of that nation, under a tyrant like putin, is abysmal. the future consists of more war and continued deterioration of the standard of living in Russia. even after putin is deposed, and he will either die or be removed within a couple of years, the damage he has wrought on the Russian people will continue for years to come. putin is one of the worst things to ever happen to Russia. and that is not an easy accomplishment. even Russian heritage folks in the usa, who historically have embraced the strong history and culture of Russia, no longer want to be associated with the nation.
And the Russian kids cannot even get a Big Mac in McDonald’s!
That and the permanent shift away from fossil fuels will be the real permanent damage to Russian economy from this foolish military adventure. They are losing their future from a one-two punch.
I could easily provide a link to the piece that forecast that “The Russian economy is slated to shrink by 30% by the end of 2022.”
But I won’t…for reasons of civility and respect, qualities that pgl simply wouldn’t understand.
Did you mommy make that claim? Good boy Jonny!
Wait your first fake quote said 20%. Now your fake quote says 30%? Jonny boy – you may lie a lot but you are not very good at lying.
As for the average decline of recessions since 1945, I thought everyone who was a macroeconomist would know that right off the top of the head, what with the GDP growth number being such as obsession.
Anyway, you’re free to calculate it yourself.
https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
Certainly a 3.7% very significant decline…but nothing like the declines that Western forecasters were hoping for earlier this year. IMO forecasting errors like those earlier this year pushed the limits of plausibility and are a perfect example of economists using forecasts to make a political statement with a shaky foundation in economics. It happens all the time.
“you’re free to calculate it yourself.”
You made the claim not me. BTW – I know the datings and the data. I challenged you to produce the results because I KNOW you lied. But I figured you would duck this one as well. You are a fraud and everyone here knows it. On top of being really stupid and a total coward.
Gee Jonny – I took your Wikipedia cite. I guess you did not know the Great Recession was the 11th US recession since BEA started reported quarterly data in 1947QI. Yea real GDP fell by 5.1%. But the 2nd largest recession during this period had real GDP fall by 3.7% and the other recessions say much smaller drops.
Maybe you are using some sort of weighted average here – you never said. But the median drop was a mere 2.2%. And the mean decline was only slightly higher.
And yea we had that temporary plunge during the pandemic which your BFF Princeton Steve insists was not a recession but a suppression.
Jonny boy – can’t write. Can’t do basic numbers. Cannot even tell the damn truth. But hey – he cannot even read his own links.
Seriously dude – why do you insist on your poor mother this way?
I wish I could find the exact joke Krugman told about median income v. mean income but it goes something like this. A man walks into a bar where the only other person was a bar tender. He buys a beer and the two men talk about how hard it was making ends meet in NYC. And then Bill Gates walks in and the bar tender screams “the average man in my bar is a billionaire”.
Now Jonny bar often says we need to consider median income not knowing the person he loves to trash most (Krugman) had the seminal joke.
Now I get that real GDP fell by almost 20% for a short while during the pandemic. If Jonny boy includes this to justify his pathetic claim and then says “average” real GDP fell by 3.7% (as in mean including Princeton Steve’s suppression) Jonny boy would have let us know what a deceptive troll he really is. But hey – we all knew that a long time ago.
“ I wish I could find the exact joke Krugman told about median income v. mean income”…and yet economists regularly refer to AVERAGE hourly earning, which everyone knows is skewed upwards by high income folks…and getting more skewed.
So if economists can take average hourly earnings seriously, I can use the average GDP decline. Or is pgl going to be hypocritical about using averages yet again?
You do take pride in being a dishonest scum. This is like how Mark Thoma would mock Jerry Bowyer’s Fuzz Charts. Or the original Angrybears would mock the deceptions of Kudlow. They had no integrity. You are far worse.
Pay attention gang – JohnH admits he routinely lies to us. And this disgusting troll is proud of his dishonesty.
Jonny boy – take a bow. You are now National Review material.
Putin must be really angry that his vaunted military has so utterly failed him:
https://www.dailystar.co.uk/news/world-news/russian-tank-chief-dies-suddenly-28828644
A former Russian army commander died “suddenly” the day after Vladimir Putin abruptly cancelled a trip to his tank enterprise. General Alexei Maslov, 69, passed away on Christmas Day in a Moscow military hospital, according to the Uralvagonzavod plant where he worked. Putin was set to fly to the plant in Nizhny Tagil – which had been criticised by the Kremlin for not producing enough tanks for use in Ukraine – on Christmas Eve. But the warmonger cancelled the visit “at the last minute” with no explanation, according to local reports. The death of Maslov follows the similarly unexplained death of Alexander Buzakov, 65, general director of Admiralty Shipyards in St Petersburg. Following the mystery deaths the FSB security service formed an “investigative group”, finding Buzakov had been healthy the day before he died and “nothing had been heard about Maslov’s health problems” prior to his death, Telegram channel Redacted number 6 reported.
“The drop in GDP in the two middle quarters of 2022 works out to a 9.6% annualized decline. Are sanctions working? As of March 3, S&P Global predicted a 7% decline (q4/q4). If Russian GDP is flat in Q4, then the q4/q4 decline will be 12.7%, not far from the -13.9% July IMF World Economic Outlook Update forecast.”
Give JohnH a couple of days and he will find some weird way of claiming 10% decreases in real GDP are the norm for the US. Yea – he does take great pride in being even more dishonest than Lawrence Kudlow.
Rosstat data is much more believable than in the old days of the USSR. But some parts of it are more believable than others, such as those more directly observable independely from outside, such as some of the kinds of data Dr. Chinn has reported on here more frequently such as foreign reserves movements. Large amounts of the Russian economy are fairly cut off from the world economy and so just goes along on its own. There is also the well known fact that conditions in Moscow are much better than in the rest of the nation economically, with Putin making special efforts to make sure that his capital city feels the economic pain the least.
I shall tell a tale on how bad the data used to be, one dating from the days when my wife was the professor of Elvira Nabiullina. She was in a position to see what data sources were being used by state planners. She learned that they used numbers from the CIA because they so disbelieved their own official numbers. This was an actual state secret she knew she had to sign off on not to reveal when she left, although, of course, the CIA itself was well aware of this absurdity.
“She learned that they used numbers from the CIA because they so disbelieved their own official numbers.”
Wait – we should believe data from the CIA?!
I need to dig up the papers from circa 2004 on how transfer pricing manipulation distorted Russian national income data.
pgl,
When the USSR finally ended on Christmas Day, 1991, the mess that Soviet data was became fully public. They were not doing as well as they were officially claiming.
All this led to all kinds of politicians in the US getting all worked up about what a bad job the CIA was doing at understanding the Soviet economy. Some of us who knew what was really going on with all this, which actually never was admitted in the hearings where these pompous dingbats ranted and raved about matters they did not remotely understand. Oh, but plenty of exciting headlines.
Of course, we shall have all kinds of hearings coming up in the new House that may make those hearings look well informed.
“They were not doing as well as they were officially claiming.”
I have no doubt about that. Note the Yeltsin economy showed a drop in Russian income. OK oil prices did fall but some of this decline was due to companies like Yukos setting intercompany prices for oil exports far below market prices.
Moscow Times
June 10, 2004
Transfer Pricing and Calculating Russian GDP
By Nat Moser
Nat Moser is an independent oil industry consultant (Natmoser@aol.com). He contributed this comment to The Moscow Times.
In an opinion piece published earlier this year in The Moscow Times, Christof Ruehl of the World Bank and Mark Schaffer of Heriot-Watt University identified transfer pricing by Russian oil and gas companies as the reason behind the oil and gas sector’s share of Russia’s GDP being dramatically understated, and the trade sector’s share similarly overstated, in the official figures. This argument has been repeated in several publications since, including in The Economist’s recent Russia Survey.
https://russialist.org/archives/8247-3.php
This link is alas the best I could do. Christof Ruehl and Mark Schaffer were basically noting how companies like Yukos would sell their oil to offshore affiliates in tax havens at intercompany prices far below market prices. We have seen other abuses of transfer pricing that distort national income accounting in various nations (hello Ireland) but the Yukos scandal was particularly egregious. Putin of course shut down Yeltsin’s messes transferring the wealth to his favorite oligarchs as opposed to the oligarchs Yeltsin like. A corruption nation with distorted statistics.