Economics

An import reduction has a more than proportionate impact on Russia’s industrial output and exports. Over one year, a 1% decrease in imports as a share of production costs across industries leads to a more than 2% output reduction and an even more significant decline in exports.

Why should we expect a slowdown of the Russian economy, what traps has it fallen into, what will help curb inflation, and what are the fiscal policy risks? These issues were discussed by economists at the Financial Congress of the Bank of Russia.

Modern technology and big data on retail sales enable more accurate and faster measurement of inflation. We are developing a methodology for calculating a price index based on data from online receipts: in the future, it will make it possible to track inflation in near real time.

Human capital is one of the key factors of economic growth, but there are few quantitative estimates of its contribution to the Russian economy. New estimates show that its contribution peaked in the second half of the 2000s and had almost disappeared by the end of the 2010s.

In a geographically large economy, different regions can respond differently to the same events. Nowcasting used for data across Russia revealed these differences as well as their dependence on the level of development and the sectoral specialisation of the regions.

There is not a single industry in Russia in which the overhang of job vacancies is not rising. Although the renewed growth of real wages will reduce this overhang, the labour shortage may persist for many years, according to Rostislav Kapeliushnikov, a labour market expert.

The number of educated and employed women in Russia is high by world standards. Russia is among the world leaders for the share of families with a woman as the main breadwinner. The weak role in governance and large pay gap are paradoxical, but have an institutional explanation.

The past two years saw an almost complete transformation of the logistics and geography of Russia’s export and import. Analysis of this process has identified a number of patterns and risks in the new structure of foreign trade.

In terms of concentration of wealth in the hands of a small group, 1% of the population, Russia is among the world’s leaders. This group is almost inaccessible for sociological analysis, but a few assessments can be made from open sources.

Many indicators point to a rise in economic uncertainty, but it is the news that reflects this trend most quickly. The index based on media archives has accurately shown all crises in the 21st century and made it possible to calculate their consequences for the economy.

After a period of record growth in 2022, gas spot prices in the European market have returned to the levels seen two years ago. Europe has managed to adapt to the reduction in supplies from Russia, but price volatility and consumption risks persist.

The inflationary episode that has been experienced by all developed countries since 2021 is not over. The risk of losing the inflation anchor and falling into the stagflation trap exists even though the effects of pro-inflation factors have almost completely worn off.

Entrepreneurship in Russia has shown great resilience to changes in the political and economic landscape: the influence of institutions and culture on business activity may persist even after extreme changes in political and economic conditions.

International sanctions have accelerated the transformation of the labour market which started during the pandemic. The market has moved from limited demand to limited supply, and this situation will persist for a long time, labor market expert Rostislav Kapeliushnikov says.

No one will argue that the financial sector affects the real one, but the number of answers to the question of how exactly it does so is almost the same as the number of economists. A problem arises in finding indicators that characterise this influence quite fully.

The reliance of Russian economic sectors on imports is relatively low and does not exceed the median for other countries, a study has found. However, 60% of Russia’s imports come from the countries that have announced sanctions against Russia.

Gravity exists not only in physics, but also in economics, and just like in physics, its laws are objective. It is far more important for small and medium-sized economies to maintain and develop economic ties with the largest economies than vice versa.

Many Russian firms prioritise their market position over productivity growth; low competition and high entry barriers reduce their incentives for innovation. This approach extends the life of inefficient businesses whilst undermining the sustainability of efficient ones.

Demography is one of the factors influencing potential economic growth. Potential growth increases in tandem with the birth rate, which is closely linked to the increase in household income.

One in five of Russian professionals with higher education and permanent employment are impoverished or low-income. According to the HSE, poverty among professionals, which seemed to be a thing of the past, is now returning, and the crisis may exacerbate it.

Transition to a low-carbon economy remains a priority for major countries including China despite the rises in commodity prices and the highest global inflation. For Russia, as its economy refocuses on Asian markets, the importance of the green transition still holds.

The index, developed by the Bank of Russia on the basis of surveys of enterprises, enables real-time assessment of the Russian economy and its sectors. It displays a high correlation with GDP, coming out in advance of it in terms of the timing of the publication of statistics.  

The Fed waited too long to tighten the policy in its anti-inflation stand, believing the acceleration of prices to have been temporary. The biggest concern for markets now is whether the Fed could avoid another policy mistake with regards to over hiking interest rates.

Russian businesses have faced foreign counterparts’ refusal to continue cooperation, suspension of imported components and the rising cost of logistics. Companies are looking for alternative production and logistics chains, the Bank of  Russia survey finds.