January 2023 Russian GDP Growth is -3.2% y/y

Year-on-year 2022 is -2.1%.

In “Russia’s economic contraction last year mitigated by government spending”, Bofit remarks on the y/y figure:

Looking again to the GDP by end use figures, private consumption contracted last year by 1.8 %, while public consumption rose by 2.8 %. The contraction in private consumption reflects the decline in real incomes (down by 1 % y-o-y). On the other hand, the contraction in retail sales (down by 6.7 %) suggests that the decline should have been more pronounced. We expect some of this confusion to resolve with the release of the 4Q22 figures. Last year’s nominal growth in public spending (over 20 % according to preliminary figures) was exceptionally high. It implies that public spending increased by nearly 10 % in real terms. Federal budget spending was up by 25 % y-o-y. Most of the increased government-sector spending showed up in public consumption and public investment.

In other words, in the absence of substantial increase in government spending, Russian GDP would’ve fallen a lot more.

I do wonder about the reliability of Rosstat numbers (reading between the lines, I suspect Bofit might as well).

Rosstat’s initial estimates of GDP by end use are difficult to interpret. Figures on the volume of total exports and imports are not released, and numbers inferred from other components imply about zero net exports last year. That estimate does not comport with available information on the value of foreign trade. Preliminary balance-of-payments figures indicate that the value of total imports contracted by 9 % y-o-y, while the value of total exports grew by 14 %. Using mirror statistics of Russia’s main trading partners, the value of Russian goods imports fell last year by 23 %, while the value of goods exports rose by 23 %.

The graph below presents some of the competing forecasts (OECD is from November, World Bank from early January, the IMF from end-January).

Source: European Council.

As of today, the IMF was closest, although with data revisions coming, this may change.

30 thoughts on “January 2023 Russian GDP Growth is -3.2% y/y

  1. MOses Herzog

    Here’s how my very very crazy (no joke or ironic sarcasm) mind works, Should I hate ALL Russians??~~ or JUST the Russian government?? And can you imagine my mind often turns to these type things when thinking on my seven years in China?? What people should I hate?? A country’s Government/ or a country’s people?? A person who I dislike, very strongly, who gave birth (literally in her womb) to a person I love very deeply ??? Waters get so muddy sometimes, don’t they?? For me they seem to.

    1. Macroduck

      Come, brother, let us hate the sin and not the sinner.

      Except for the head sinners. It’s OK to hate them a little.

  2. pgl

    “This suggests that the 2023 budget deficit will be much larger than the 2 % of GDP planned for this year.”

    2% of GDP would be less than $40 billion per year. Now if much larger means twice that we are talking about $80 billion, which is a far cry from the $300 billion Princeton Steve just made up but keeps repeating. Of course all of his numbers are just totally made up.

  3. pgl

    “Russia’s economic contraction last year mitigated by government spending”

    Military Keynesianism!

    That Rosstat is slow to report exports and imports is a bit disappointing. Our BEA does a nice job of tracking such things here but I guess economic reporting for Russia is more difficult.

  4. pgl

    Has this been updated?

    BOFIT Forecast for Russia 2022–2024
    10 October 2022

    We now expect Russian GDP to contract by 4 % this year and 4 % next year – with the caveat of no further major shifts in external conditions. Russia is projected to revert to very modest growth in 2024, but importantly, there will be no rapid recovery. The war and international isolation of Russia will further lower the country’s already depressed potential growth rate.

  5. Moses Herzog

    Did I mention in my sauced earlier comments that I got Macroduck’s Pinot Grigio??? That’s how much I feel “internet pal” with Macroduck, I took that very serious and went all along the grocery isle ’til I found one. (It had to have over 10%, and it did , and that’s how sick I am, see??) But seriously, I will tell my impressions of the drink in a sincere way later this morning. But I take gestures of feeling very seriously,

    Did I mention on this blog how many times I tried to kiss girls and they turned their face away?? And most of those were my Mom…… (It’s a joke Menzie, I don’t mind you put that up).

  6. Steven Kopits

    Sonnenfeld says that the World Bank and others get their information from Rosstat. One little problem is that Rosstat has had a change of leadership 3 times. Why? Sonnenfeld says it’s because Putin is looking for lackeys (my word) who will state the data he wants stated.

    As a member of the IMF and the World Bank, Russia is required to submit data to the IMF and World Bank. “They are not submitting.” By the second quarter of 2022, Russia stopped submitting the data.

    Putin wakes up in the morning and decides what the GDP should be.


    1. pgl

      ‘Putin wakes up in the morning and decides what the GDP should be.’

      Really Stevie. I thought that was what you did.

    2. pgl

      Jeffrey Sonnenfeld is the Lester Crown Professor in the Practice of Management at Yale School of Management. For anyone who spent a year in New Haven, we all know that their School of Management has a nice cafe but other that has nothing to do with Yale’s economic department. Sonnenfeld may have been advising CEOs to get their business out of Russia but to suggest he knows anything about how economic data is produced as Jack Welch level of stupidity.

    3. Macroduck

      Entirely likely. This what authoritarian regimes do. Note that, as part of the annual meeting of China’s parliament, a reshuffle of top officials is underway. No faction other than Xi’s will be represented in top positions.

      There are more and less authoritarian regimes. The drift in Russia and China has been toward more authoritarianism, and so toward less accountability, under current leadership. Bad data, recognized by outsiders as bad, are a coincident indicator of drift.

  7. pgl

    David Henderson is a member of the Hoover Institute. Like little Stevie boy cared about the creds of people he is citing as alleged authorities.

  8. JohnH

    Medea Benjamin’s assessment: “Who’s Winning and Losing the Economic War Over Ukraine?
    After a year of slaughter and destruction in Ukraine, we can declare that the economic winners of this war are: Saudi Arabia, ExxonMobil and its fellow oil giants, Lockheed Martin, and Northrop Grumman.” Quelle surprise!!!! https://www.commondreams.org/opinion/winning-losing-economic-war-ukraine

    Yes, Medea Benjamin has a post-graduate degree in economics. After the botched forecasts from mainstream economists last year, perhaps it’s time to consider others’ analysis.

    1. Macroduck

      The IMF estimates based on inputs it is provided. See Steve Kopits’ link. The inputs are from Russia. Which means your constant “Economists got it wrong. i win!” comments are baloney. The piece you link to is social commentary, based partly on questionable economic data.

      I have no view on the quality on Ms. Benjamin’s abilities as an economist. Worth noting, though, is that you avoided mentioning that her advanced degree is a Master’s, not a PhD. Nothing wrong with a Master’s, but there is something wrong with your effort to polish Ms. Benjamin’s credentials. It’s rather like your “Look at me! I read more than one language!” comment – poor man’s credentialism.

      For innocent bystanders, allow me to offer a few more of Ms. Benjamin’s credentials. By profession, Ms. Benjamin is a social activist (evidently, an admirable one), with anti-war activism part of the mix. She is not a practicing economist. Benjamin has a stated bias onthis subject. She has published a book on Russia’s war on Ukraine, and this article supports the position she takes in that book.

      Johnny has once again offered a strawman argument, in “time to consider others’ analysis”. There has been a public debate about the support of democratic nations for Ukraine since Russia’s renewed invasion. Johnny is dishonest in suggesting otherwise. But then, Johnny is reliably dishonest.

      By the way, Johnny’s “Econimists got it wrong. I win!” brand of commentary is closely related to his “I found an article that agrees with me. I win!” comments. Johnny briefly attempted to make his own arguments, but made a hash of it. His economic analysis was a joke. Perhaps that’s why he now resorts to this other sort of rhetorical childishness.

      1. pgl

        I did not know she was peddling a book. Here are some of the reviews:


        “This careful, informed, judicious study is an invaluable guide to understanding Russia’s criminal invasion of Ukraine, and most crucially, how we can act to help bring this terrible tragedy to an end.” —Noam Chomsky

        Russia’s criminal invasion of Ukraine! Hey this is not working out little Jonny boy intended!

      2. pgl

        By the way, Johnny’s “Econimists got it wrong. I win!” brand of commentary is closely related to his “I found an article that agrees with me. I win!” comments.

        Exactly. You know when Jonny boy tries to chastise Paul Krugman for never writing about inequality or how there could be losers from trade, we remind him of the tons of pieces Krugman has written on these topics. But Jonny boy dismisses them on one of two grounds. “Well that was written a year ago and since it was not this month it does not count”. Or better – “well that was published at the Irish Times which does not count since it was not published by the NY Times”. I guess Jonny boy thinks it was written in Gaelic. But Jonny boy is multi-lingual so he has the ability to search articles written anywhere or any point in time. But Krugman does not. Funny how that works,

      3. JohnH

        How quickly Ducky forgets: “Forecasts in the spring of (2022) predicted a drop in GDP of at least 7-8% (and possibly as much as 11%) for 2022. Prices were expected to rise by 20-25%.” (Actually some even predicted a GDP fall of 30%!!!)

        NPR went on: “But Russia has not been brought to its knees. Far from it: Forecasters say Russian GDP for 2022 will likely fall, but only about 3.3−3.4%. Inflation, meanwhile, will likely end the year at roughly 12%: bad, but not close to as painful as predicted. And foreign direct investment? Estimates say it will fall by a mere 1%.”

        As I said, “After the botched forecasts from mainstream economists last year, perhaps it’s time to consider others’ analysis.” Or is economics a profession with no accountability?

        1. pgl

          Yea – you do have a habit of repeating the same old BS over and over again. Is there a point to any of this? That Jonny boy is one dumb jacka$$? Dude – we got it.

    2. pgl

      Her pro-Putin bias is on full display:

      ‘Western sanctions would erect a new Iron Curtain, hundreds of miles to the east of the old one, separating an isolated, defeated, bankrupt Russia from a reunited, triumphant and prosperous West. Not only has Russia withstood the economic assault, but the sanctions have boomeranged–hitting the very countries that imposed them.’

      Poor little abused Russia. Wait there’s more. She bought that unsubstantiated Hersch claim that the US blew up the Nordstream pipeline. Yea – she is not practicing economics. And she has as little respect for reality as Jonny boy.

      1. Macroduck

        It’s bad economics to (tacitly) assume trade sanctions weren’t expected to hurt those imposing the sanctions. Trade at market prices is assumed to be mutually beneficial. Western European governments knew they were choosing hardship for Ukraine’s benefit, and did it anyway. All themore admirable for that knowledge.

        We see this over and over – “Nyah, Nyah! The West messed up!” No, the West chose sacrifice as the cost of supporting its principles. And as the cost of containing Russia, just Ms. Benjamin says. What she may believe, but others do not, is that defeating Russia’s (continued) invasion of Ukraine is somehow contrary to the stated principles of democratic governments. Ms. Benjamin’s beliefs are relevant to the wider debate.

  9. pgl

    While Mike Jabba the Hut Pompeo is a loathsome person, this was interesting:


    “We are $31 trillion in the hole. We’ve got to begin to grow the economy, build it back with lower taxes, and when we do that and grow our economy, we’ll get it back right,” he added. “It’s going to take a true conservative leader, Shannon.” “Are you saying that President Trump wasn’t a true conservative leader?” Bream pressed. “$6 trillion more in debt,” Pompeo observed. “That’s never the right direction for the country, Shannon.”

    That likely made Bruce Hall’s little MAGA hat catch on fire! But cutting taxes while complaining about deficits? Did I say Pompeo is loathsome?

    1. James

      The GOP’s answer is always “cut taxes” – in Wisconsin – the WIGOP is refusing to help fund schools, roads, and healthcare as Gov Evers is proposing in his latest state budget – (BTW – officials in small towns/GOP rural areas in Wisconsin are crying for help to fund local emergency, healthcare funding) – instead – they want to use historic budget surplus (fed $ WIGOP is sitting on) – to “cut taxes” – another example of the maxim – do not trust the GOP with money or governance. Meanwhile – the WIGOP is still refusing to help people in Wisconsin get healthcare – because they don’t want to take “Obama” money or something – heck – even the GOP in NC is reasonable enough to take ACA funding. https://www.axios.com/local/raleigh/2023/03/02/north-carolina-republicans-reach-agreement-to-expand-medicaid

      1. pgl

        If cutting taxes increases consumption demand then it reduces national savings. Yea this should be obvious to anyone including uber supply siders like Donald Luskin.

        I once emailed Luskin asking him how in the standard new classical model could a reduction in national savings do anything but lower long-term growth. Luskin’s enlightened reply was a lot of angry huffing and puffing that asked “do you know how I am”?

        I had a reply – a link to a Brad DeLong post that awarded Luskin the prize for STUPIDEST MAN ALIVE.

  10. pgl

    Anyone who thinks blogging is free speech – do not move to Florida:


    One-time Speaker of the House Newt Gingrich (R-GA) earned some predictable criticism — and surprising praise — Sunday after he slammed an “embarrassing” GOP Florida bill demanding that bloggers writing about politicians register with the state. “The idea that bloggers criticizing a politician should register with the government is insane,” Gingrich tweeted. “It is an embarrassment that it is a Republican state legislator in Florida who introduced a bill to that effect. He should withdraw it immediately.” State Sen. Jason Brodeur’s Senate Bill 1316 regarding “Information Dissemination” would require anyone who is paid to write “an article, a story, or a series of stories” about the governor, lieutenant governor, a state Cabinet officer, or any member of the Florida Legislature to register with the state Office of Legislative Services or the Commission on Ethics. The bill would impose fines on any blogger covering politicians who refuse to register up to a maximum of $2,500. There would be an additional $25 daily if the fee isn’t paid. Several Republicans — and even some Democrats — hailed the tweet by Gingrich, long considered right-wing and just the kind of politician who might have supported mandating writers to register with the government. Many long-time critics, however, also blamed Gingrich for pushing Republicans down this predictable path.

  11. 2slugbaits

    So if China decides to provide Russia with weapons and ammunition, will that materiel be sold to Russia or gifted to Russia? If sold, then presumably it will be scored as a Russian import and further hurting GDP, right?

  12. James

    How can 100,000-150,000 dead (with an estimated 600-700 more per day); 200,000? wounded and estimated 300,000 to 1,000,000 men leaving Russia be good for your economy? For what? Some thousands of hectares of shelled/cratered land in Donbas, southern Ukraine – So insane criminal Putin and his thugs (there is no Russian military) can commit war crimes and deport Ukrainian children and steal appliances? And this is what MAGA GOP thinks is smart leadership. Although they want a divorce from the U.S. – I doubt MTG or Ted Cruz or Tucker Carlson will be shipping out to Russia anytime soon.

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