NEW – February 8, 2023
Yes, it is not every day that a powerful international financial institution suffers a complete fiasco. Now textbooks will be written on the Russian economy.
Back in April 2022, the IMF predicted an 8.5% drop in Russia’s GDP as a result of tough sanctions imposed by the European Union, the United States and a number of other countries. Firstly, Russia lost access to the international interbank information transfer and payment system SWIFT, then an embargo was imposed on the supply of oil and gas to Western markets, and 50% of assets were frozen to the Central Banks of Russia. The departure of foreign companies has had a very negative impact on the work of many important sectors of the Russian economy, including aviation, finance, intellectual technologies, agriculture and hydrocarbon production.
And the forecast of 8.5% from the IMF was called ridiculous by many, while analysts of the American media holding of financial and business services “S&P Global Market Intelligence” in April 2022 predicted a drop in Russia’s GDP by at least 11% and inflation from 17.8% and above.
To date, more than 13,500 sanctions and restrictive measures have been introduced against Russia. According to many Western economists, no country in the world can withstand such large-scale sanctions.
In fact, it is not surprising that many financial experts reacted to the IMF forecast with mild irony, and some even accused the IMF of helping Russia.
For example, the World Bank (an international financial organisation with headquarters in Washington) predicted a decline in the Russian economy by 11.2%.
Even our Central Bank predicted a drop in Russia’s GDP from 8 to 10%.
Bloomberg, one of the most authoritative providers of financial information for professional participants in financial markets, in May 2022, referring to its “sources” in the Russian government, predicted a decline in the Russian economy by 12% or more, thereby predicting the worst dynamics of the Russian economy since 1994.
There was no limit to the joy of Western grovellers: their cherished dream was about to come true and Russia was collapsing.
Actually, according to all the rules of the international market, this should have happened.
But, as is usually the case when trying to flirt with Russia, something went wrong…
At first, the dollar exchange rate after taking off to 120 rubles fell to 60, then with extreme caution in the Western press began to publish articles about the recovery of the Russian economy.
The British “The Economist” states: “While Europe teeters on the brink of recession, Russia is emerging from one. Real-time data shows a weak but strengthening economy.”
Uncomfortable questions from journalists are beginning to leak into the Western press.
“Why isn’t the Russian economy collapsing after all the sanctions it’s been subjected to?” wonders Emmanuel Todd. A French journalist comes to the conclusion that Russia’s GDP and the stability of its economy are incorrectly estimated.
The Western media, who came to Russia hoping to see the devastation and lack of goods of everything and anything, began to ask uncomfortable questions when they saw the shelves of Russian stores filled with goods and products.
“Russia: how can the country still hold on despite the sanctions? Six months after the introduction of sanctions, going to a Russian supermarket is like going to any other Western supermarket,” the Western journalist stated. The shelves are well stocked. Customers can easily find even French products or bottles of wine from Europe. How is this possible?
It’s inconvenient somehow. There is no collapse, and the Russian economy is not in distress. And for the first time, Western experts admit an incredible idea — the default of the Russian economy may not happen, despite all the sanctions.
The IMF is also not far behind and is revising its forecasts for Russia: its experts predicted a decline in the Russian economy in July 2022 by 6% instead of the April 8.5%. But at the same time, in order not to anger the international community, the forecast for 2023 worsened, predicting a decline in the Russian economy of 3.5% (in April it was 2.3%).
However, this forecast quickly ceased to be relevant, and in October 2022, the IMF again adjusts its forecasts for the Russian economy, and is constantly improving them. Now, the decline for the end of 2022 was projected at only 3.4%, which is slightly more than the fall during the pandemic restrictions in 2020 – 3.1%.
The forecast for 2023 is also revised from 3.5% to 2.3%, returning the April values.
And here many financial analysts have already thought about how this happens. None of the previously given forecasts regarding the Russian economy came true at all for anyone, not even the Central Bank of Russia itself.
Why the Russian economy, despite all the imposed restrictions and “price ceilings”, did not fall by at least 5% — no one could answer, not even Nobel laureates in economics.
Last year’s October forecast of the IMF again turned out to be erroneous, and already with regret, the new version states the actual decline in Russia’s GDP by 2.2%, that is, less than in the period of 2020. Moreover, the IMF experts were forced to revise their forecasts for 2023: instead of a decline in the economy, on the contrary, growth by 0.3%.
As a result, IMF experts made a 3.86-fold mistake in their forecasts for Russia! Pulling figures from the sky. Well, the revision of the forecast for 2023 from falling to growth is already a recognition of the IMF experts’ capitulation to the phenomenon of the Russian economy.
Inexplicably, Western “sanctions from hell” caused less damage to the Russian economy than the pandemic restrictions in 2020.
Even in 2015, the decline in the Russian economy was more significant — 3.7%.
How the Russian economy withstood Western sanctions will now be included in all the economic textbooks of the world.
And now it is not clear what Western countries should do in this situation. The Russian economy is adapting faster than new sanctions are imposed. Even inflation is already trying to catch up with inflation in the EU countries: in the EU – 10.4%, in Russia — 11.9% (by the end of 2022).
To say that no one expected this from the economy in Russia (even the citizens of Russia themselves) is an understatement.
This is really a phenomenon.
History draws its conclusions for us, and we simply state the fact…
Aleksey Kochetov
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