A recent forecast from the international rating agency Moody’s predicting a 3% contraction in Russia’s gross domestic product for 2023 has drawn critical attention. The Ministry of Economic Development states that the projection overlooks the broad range of measures now being put in place to accelerate the economy’s adjustment to the impact of large sanctions. This view is echoed by the ministry, which argues that the country is actively pursuing policy responses designed to support growth and resilience even as external shocks persist.
According to the ministry, Moody’s forecast about the 3% drop in Russian GDP in 2023 fails to reflect the full scope of structural and macroeconomic actions underway to adapt to new conditions. The ministry notes that earlier estimates by Moody’s missed the actual outcome in 2022, when Russia experienced a 2.1% GDP decline over the year. This was a period marked by tighter external conditions and adjustments across various sectors, yet the economy demonstrated a capacity to absorb shocks while continuing to perform in key domestic activities. At the time, Moody’s had projected a steeper decline, reaching around 7%, underscoring the volatility and uncertainty that characterize assessments of a sanctioned economy.
As of late February, Moody’s projected a 3% contraction for the current year. Analysts also noted how the level of federal budget financing could influence the path of the recession. There is concern that sustained financing needs may contribute to higher inflation and pose challenges to macrofinancial stability, even as the state continues to deploy support measures and policy tools aimed at stabilizing demand and protecting essential sectors.