Thread by @sambendett

1/ Russia's Central Bank released a detailed analysis of the country's economy, with predictions up to 2024. Key point - the economy is proving a lot more stable than expected. Main points below. kommersant.ru/doc/5979260

2/ "The “momentum” of economic change created in the spring of 2022 is expected to run out in 2024. In 2022, the basis of economic growth was industrial capacity utilization, which is now at a record high. In 2023, it is consumer demand."

3/ "In 2024, Russian economic growth will be supported by the investments made in the previous two years, which are actively being made now. The economic adaptation is far from both the serious problems and optimism: the forced restructuring of the economy costs money, and these… twitter.com/i/web/status/1…

4/ "The Central Bank report explains for the first time in detail how the current state of the economy's adaptation to changes caused by the Russian military operation in Ukraine looks like, to the G7 sanctions pressure on Russia, and to the long-term consequences of the… twitter.com/i/web/status/1…

5/ "Central Bank predicts that GDP will stabilize at a low (2%) quarterly growth until 2025. Due to the same base effect in 2023, quarterly GDP dynamics figures will slightly decrease by the end of the year, and in the last quarter of the year, the Central Bank allows even a… twitter.com/i/web/status/1…

6/ "The report explains the reasons why it adjusted the expected dynamics of macro indicators in the forecast. Since the beginning of 2023, business activity has grown in a wider range of industries than might have been expected."

7/ "The Russian economy is being rebuilt faster than expected, and the impact of this restructuring on price growth rates has decreased - along with the (agricultural) harvest, this has turned into slightly overestimated expectations of inflation dynamics."

8/ "All negative factors for GDP dynamics, the influence of which is usually exaggerated in alternative forecasts, were taken into account: for example, oil and gas export forecasts were lowered, import forecasts were raised, a short-term improvement in global economic forecasts… twitter.com/i/web/status/1…

9/ "The report is confident that growth rates during the restructuring of the economy are significantly lower than they would be under normal conditions - this is the price of forced restructuring. The main change in the Central Bank’s estimates is in the dynamics of 2023… twitter.com/i/web/status/1…

10/ Clearly, the government's goal is to create a positive outlook on the current situation. Certain parts of the Russian economy have indeed proven resilient to sanctions, while others were hammered by the impact. One of the affected indicators is Russia's high-tech sector...

11/...which experienced a brain drain and personnel outflow, while at the same time trying to restructure supply chains and acquisition for key Western and global elements like microchips. Some of these projects were paused or stopped altogether...

12/ ...and whether the government considers such economic pauses as "net positive" given that the Russian government is now investing in high-tech projects to make up for lack of pre-2022 global investment.

13/ The large-scale government investment in specific industries would indicate growth and stabilization on paper and in forecasts, but the long-term impact is hard to predict given Russian government's inefficiencies in managing large key high-tech projects (i.e. Skolkovo 1.0).

14/ At the same time, current Russian consumer demand is restructuring away from Western and global products available before 2022 to either domestic available alternatives, or "friendly", more expensive imports (no competition) from China and Turkey. svpressa.ru/economy/news/3…

15/ Elvira Nabiullina, Russia's Central Bank Chief, was grudgingly accepted as the person who did a lot to stabilize the Russian economy in 2022. She is at the helm in 2023, and likely to continue into 2024-2025. reuters.com/markets/curren…

16/ The report does not seem to factor in the impact of potential political or socio-cultural consequences to Russia's stance in the current war, such as maintaining what looks like a very costly status quo with intent to long-term fight.

17/ There is also a public discussion on whether or not Russian economy should be even more state-managed as a consequence of severing many links to the global markets, products, services and supply chains.

https://twitter.com/sambendett/status/1517943381653139457