Russia can look to 2030 with confident pessimism
The most successful macroeconomic forecasts in Russia have been published. report “What’s next?” on European and Russian scenarios for 2022-2030.
The preponderance of this close to government analytics firm over the main characteristic in that its developmentcompiled just two weeks after February 24, a very successful characterization of the Russian economy under sanctions and is now coming true on almost all counts.
The more interesting is the view of the employees of the center in a more distant perspective.
As solid sensations, they are felt not only in Russia, but everything is possible. As a structure that serves official circles, the CMASF even considered it its duty to return some geopolitical remarks – something about China, Russia, Iran, Egypt and India, currently closing the old world centers “through episodes of repetition, economic and ( local) mass demonstrations”. But there is no concretization of these thoughts in the conclusions, and all of them have spread reasoning there.
As for the surrounding world, the CMASF sees only two scenarios for it in this decade: “base” (probability of realization of which is 75-80%) and “crisis” (20-25%). The first is about what has been treated in recent years, with the return of infection growth rates after a slight increase in the hitch to the usual 3–3.5% per year. The second is related to “an accelerated energy transition… with the most severe consequences of hydrocarbon energy… and the specific structure of a susceptible crisis.” Growth growth rates in this case will be more modest.
And, which will directly affect Russia, according to the first option, a barrel of Urals will fall in price by about $15 by 2030 against the level of 2022-2024, and by $25 according to the second.
In addition, the volumes of domestic exports of hydrocarbons “probably will not be in the near future.” Therefore, Russia, CMASF predicts, “has to carry passengers and jeopardize the crisis with a shrinking inflow of natural rent.” That is, there will be fewer petrodollars at any turn in international development. But why “overcome” the crisis? Indeed, on a global scale, its probability is estimated by experts as three times lower than the prospect of an acceptable rise.
Because we are not talking about the global, but about our own Russian crisis. CMASF soberly proceeds from the fact that “the sanctions lasted for a long time” (for the next 10-15 years for sure) and “it will not work to wait them out, as they waited out the lockdowns due to outbreaks of covid.”
A bureaucratic view of the objection leads to the fact that, firstly, they are inevitable, and secondly, by and large they are useful, full of new opportunities and, after overcoming temporary manifestations, they will open a beautiful face for the holder.
We must pay tribute to the CMASF – naturally, it is not included in the access to the controversy with the official position. But his calculations speak for themselves.
For Russia in the current decade, the CMASF prescribes three scenarios.
one. “Autarky” (with a probability of 10-15%). “Russia, to the highest degree possible, does everything itself, albeit at the expense of lowering the technological level, reducing consumption and using the characteristics of manufactured products, and worsening the standard of living of the population.”
2. “Institutional inertia” (at least 45%). “It is recognized that the level of instability in the economic and foreign policy situation is extremely high, that it is almost impossible to implement any kind of integral “development policy”. All that can be done macroeconomically is to maintain economic and financial (balance sheet, exchange rate, inflation) stability, and ensure sustainable financing of budget obligations. In general, the economic policy, which is well known from the consequences of 15 years, is perhaps somewhat tougher due to the rent deficit. Its result in qualitatively new conditions can be a protracted stagnation with a gradual growing backlog.
3. “Struggle for growth” (40%). In this situation, the CMASF sings of the unification of officials, merchants and the people in a single impulse; man-made surveys that have not yet been closed for Russian goods; the likelihood of the best of the Chinese experience, and so on. n. The result is a quite successful growth of the economy and prosperity by the end of the twenties. True, only if there is no international crisis, the probability of which, as we remember, is not so small (20-25%). For this detection, CMASF does not provide any estimates for any of the three Russian infections. Let’s make a plausible assumption that the ratings were disappointing, so they are not pending.
And certainly unsatisfactory should be found forecasts for “autarky”, which also provide for the presence in the calculations. The emergence for the international reaction – “basic” and “crisis”. It is only emphasized that the autarkic option, although “extremely unlikely,” however, “at the level of transition practically to a” war economy “may be almost impossible in the event of a further sharp escalation of the conflict between Russia and the countries that are geopolitical sources.”
Every Russian now weighs a little how likely “further escalation of the conflict.”
One way or another, in the CMASF forecast, when calculating only for the “inertial” and “fighting for growth” Russian options, which are implemented only in the assessment with a favorable “baseline” world scenario. The total assessment of their probability, therefore, at the level of 65%, which they do (according to CMACP) is almost exactly in half.
In cases of a three-time collection from 2022 to 2024, this is the time of a decline in GDP and the beauty of public consumption. Then both start growing.
According to the “inertial” version, Russian GDP will slightly exceed the pre-sanction level of 2021 only in 2030, and consumption will return to the previous level in 2029.
According to the “fight for growth” option, pre-crisis standards will be restored already in 2026, and in 2030 GDP and consumption will exceed the level of 2021 by 10-14%.
Given that the rate of economic growth in the second half of the twenties is presumably accelerating and by the slowdown in growth rates, under the “inertial” scenario, it reaches less than 2%, and under the “struggle at the expense of growth” scenario, it is 2.5-2.7%.
That is, the most difficult option promises less growth than is predicted for the world as a whole. The gradual reduction of Russia’s weight in the world economy is presented as the maximum possible success. And in a realistic, especially especially difficult version, an almost ten-year radiation return to pre-sanctions stagnation is prescribed. Calculations for even more non-winning reactions.
Shades of pessimism, with the materials of Russia, it is necessary to look into their economic future. But there is no hope for flourishing in the twenties.
Vitaly Grankin