Since March-April 2022, when it became clear that the sanctions would not lead to a truly large-scale crisis, estimates of the development of the Russian economy have been constantly improving. Of the latter, the increase in the forecast of the Central Bank of the Russian Federation, which now expects GDP growth by 0.5–2% for the year against the previous range from -1% to +1%. The Ministry of Economy’s estimates for 2023 have also improved, from falling 4.2% last September to rising 1.2% this April.
Nevertheless, many experts still feel skeptical about the restrictions imposed by Western countries. Quite often one hears that we simply have not yet felt the full weight of the already imposed sanctions.
For the further development of the economy, it is important that business has taken a positive stance. The other day, Rosstat published a survey on the mood in the manufacturing industry. The survey results presented in it show that companies see fewer and fewer obstacles to development.
The share of those who indicated an insufficient need for goods and services in the domestic market decreased to 40%, and less than 10% noted the problem of competition with imports. There is no deterioration in the situation with external demand, although in this case the sanctions, in theory, should have had an impact. It turns out that in the manufacturing industry, we see an improvement in expectations for domestic demand and at least no deterioration in external demand. This alone may be enough to increase production and GDP.
With restrictions on the level of physical capabilities of the release, everything is not so clear. The shortage of qualified personnel persists against the backdrop of a low level of general unemployment, the mobilization and departure of some citizens. But entrepreneurs do not show particular concern because of this factor – it is evaluated at the same level as during the last decade.
The proportion of those who note the lack of raw materials and supplies remains high, which may be a reflection of problems with logistics and the supply of certain goods to the Russian Federation. At the same time, compared to last year’s polls, the significance of this reason has somewhat decreased. And it is rarely mentioned among the “limiters” to development.
A surprise is the decrease in the negative associated with the shortage or depreciation of equipment, despite all the difficulties with imports. According to the dynamics of responses, it is noticeable that the situation has a long-term trend towards improvement, which has not been interrupted even in 2022. This remarkable fact shows that the risks of a shortage of production equipment can be greatly overestimated in the minds of investors and economists.
The most significant changes are associated with financial opportunities, and in all monitored areas – interest on loans, equity and taxation. The share of companies reporting problems in this area has fallen to its lowest level since 2006, when the calculation of indicators began.
Such answers, even in the absence of tax cuts and the tough policy of the Central Bank, say only one thing: from the point of view of finance, Russian companies are doing very well. Businesses have the resources to invest, to adapt to new conditions, and to increase wages – which, by the way, will contribute to the growth of consumer demand and, as a result, the economy.
Separately, it is worth noting the polarization of assessments of the general situation. On the one hand, the uncertainty factor is most often cited as a deterrent. On the other hand, the share of respondents who reported that there are no restrictions on increasing production is at its highest since 2006.
To sum up, companies rate their capabilities exceptionally highly, but at the same time they also believe that the state of the economy as a whole has worsened. This discrepancy can be explained by the influence of the negative news background, which allows us to perceive our own strong indicators as an exception to the rule. On the whole, the positive mood suggests that estimates of the increase in GDP will continue to be revised for the better in relation to the values that are included in the macro forecasts now.
Author – Director for Analysis of Macroeconomics and Financial Markets of Alfa Capital Management Company
The position of the editors may not coincide with the opinion of the authorShare: