Sanctions and Russian Labor Market: The Effect is not Yet Evident

Victor Yu. Lyashok – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The unemployment rate continues to fall, reaching 3.9% by May. This trend generated by international sanctions in the context of the economic crisis, can be explained by two reasons. On the one hand, it is a poor initial effect of sanctions, which will nevertheless intensify in the future. On the other hand, sanctions primarily affect medium and large companies, which in times of crisis are much less inclined to lay off employees compared to small businesses.

Key words: labor market, sanctions, unemployment rate, employment, recruitment/dismissals, wage.

JEL-codes: J21, J30, J60.

Estimating the Decline in Russia's GDP Due to the Trade Restrictions with the EU, the US, Great Britain and Japan

Andrey V. Zubarev – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Mariya A. Kirillova – Junior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The introduction of international economic sanctions against Russia in February-March 2022 will have a strong negative impact on Russian output – both in the short and long term. The disruption of logistics chains, the ban on attracting external financing, statements by major Western companies about the cessation of investment in Russia and the closure of international projects involving Russia are expected to lead to a reduction in domestic output. The prolonged ban on imports of high technology and equipment to the country will also have a negative impact on output. In addition, the plans of some states to gradually refuse to buy Russian crude oil, gas and coal may severely reduce export revenues.

This article presents scenario projections of output losses in the Russian economy as a result of varying levels of reduction in external demand and supply from Russia’s key trading partners within the framework of the global vector autoregression model.

Key words: international economic sanctions, Russian GDP, scenario projections.

JEL-codes: C32, C53, E17, F17, F51.

Corporate Lending in January-May 2022

Sergey A. Zubov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences, Associate Professor (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Changing macroeconomic conditions owing to the imposed anti-Russian sanctions had a restraining effect on dynamics of corporate lending for legal entities. Growth in credit risk and a sharp increase in the key rate resulted in a reduction in the volume of loan applications and loan approval rate. Subsequently, gradual lowering of the key interest rate and other measures approved by the government and the Central Bank have helped to stabilize the situation in the corporate lending sector. Nevertheless, persistently high risks will have a negative impact in the near term on those indicators defining the quality of the bank’s corporate loan portfolio.

Key words: Russian banking sector, corporate lending, Bank of Russia, sanctions.

JEL-codes: D81, E58, G21, G38.

Monetary Policy and Inflation in July 2022

Yury N. Perevyshin – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute for Economic Policy; Director of Center for Central Banks Studies of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Following the meeting on July 22, the Bank of Russia cut the key rate by 150 bp at a time to 8% per annum, while most analysts expected the rate reduction by 50 bp The decision was motivated by the slowdown in current inflation, lower inflation expectations of households and businesses, as well as weak consumer demand. The Bank of Russia has strengthened the signal on the further dynamics of the key rate compared to the last press-release, however it is still rather soft, which indicates a continuation of the monetary cycle easing in H2 2022. The updated range of the average key rate value for 2022 allows for its reduction to 6.5% by the end of the year.

Key words: inflation, monetary policy, key rate, capital outflow, Bank of Russia.

JEL-codes: E31, E52, F31.

Necessity to Develop Preventive Measures to Sustain Prices for Grain Producers

Natalia I. Shagaida – Director of Center for Agro-Food Policy of the Russian Presidential Academy of National Economy and Public Administration; Head of Agricultural Policy Department of the Gaidar Institute for Economic Policy, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Denis S. Ternovskiy – Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences, Associate Professor (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

At present, grain stocks have been demonstrating an anomalous upward movement pattern. After the start of mass harvesting, the risk of overstocking and grain prices for producers sliding below a comfortable level has been high. In this connection, urgent measures preventive are required to support the domestic market.

Key words: agro industrial policy, agricultural market, grain market, purchasing intervention, grain reserves.

JEL-codes: Q11, Q17, Q18.

Balance of Payments in Q2 2022

Alexandra V. Bozhechkova – Head of Monetary Policy Department of the Gaidar Institute for Economic Policy; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alexander Yu. Knobel – Head of Foreign Trade Department of the Gaidar Institute for Economic Policy; Director of Center for Foreign Trade Department of the Russian Presidential Academy of National Economy and Public Administration; Director of the Institute for International Economics and Finance, Russian Foreign Trade Academy, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute for Economic Policy; Director of Center for Сentral Banks Studies of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

As of Q2-end 2022, the current account surplus went up 4.1-fold compared to the same period of the last year on the back of growth in the value of Russian exports amid high prices for commodities and reduction of imports under the sanctions. The deficit of the financial account of the balance of payments, including reserve assets, was formed resulting from the growth of foreign financial assets with a decrease of foreign liabilities. A significant role in the stabilization of the balance of payments and the foreign exchange market was played by strict capital flow restrictions put in place in Q1 2022, which were eased in Q2 2022 due to the rapid strengthening of the ruble to the level of H1 2015.

Key words: balance of payment, exports, imports, current account, ruble exchange rate, outflow/inflow of capital, Bank of Russia.

JEL-codes: E58, E44, F32, F21, F31.

Survey of Current Business (May-August 2022)

Sergey P. Aukutsionek – Head of Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Yegorov – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Inessa A. Bachirova – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana V. Serzhantova – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In May 2022, both diffusion price indices reached the lowest value in 1.5 years: the diffusion price index for manufactured goods was 50%, and for purchased goods – 79%. The maximum value for 2.5 years was reached by the share of enterprises that do not purchase equipment for 2 or more consecutive months (41%). And the diffusion index of equipment purchases within a month decreased by 13 points and in May amounted to 21%. This is its minimum value for 2 past years. At the same time, 58% of the survey participants expect an increase in output in 3 months, which significantly (by 13 points) raised the value of the corresponding diffusion index, which reached its annual maximum (65%).

Key words: Russia, industry, industrial enterprises, price level, wages, employment, output, investment, indebtedness to banks, order-book level, stocks of finished products, capacity utilization rate, financial situation, production restrictive factors.

JEL-codes: D22, D24, G31, L23, P23.

Structural Slowdown: in 2022-2025 the Contribution of Fundamental Production Factors to GDP Dynamics Will Decrease

Sergey M. Drobyshevsky – Scientific Director of the Gaidar Institute for Economic Policy; Deputy Scientific Director of the IAES, Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences, Associate Professor (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel N. Pavlov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Kaukin – Acting Head of the Scientific Direction «Real sector» of the Gaidar Institute for Economic Policy; Head of Department for System Analysis of Sectorial Markets of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The GDP growth decomposition shows that the imposition of sanctions and macroeconomic turmoil in early 2022 led to a 1 percentage point slowdown in Russia’s structural growth. Stagnation of structural growth rates at the level of about 0.3–0.4 p.p. is expected up to 2025. In 2022 foreign trade component is expected to make largest positive contribution to GDP growth rates at the level of 1.3 p.p., while the market component (business cycle plus random shocks) will decrease to minus 9.5 p.p. which is comparable to the value achieved during the global financial and economic crisis of 2008–2009.

Russian economy’s recovery in 2023–2025 will be provided mostly not by fundamental factors of production (due to a significant decrease in the level of economy’s productivity), but by relatively unstable components of output dynamics: contribution of the market component to economic growth rates will be about 2.5–2.8 p.p. in 2024–2025 (with contribution of minus 1.5 p.p. in 2023), foreign trade component will gradually decrease and is expected to reach zero level by 2024.

The article was written on the basis of the RANEPA state assignment research programme.

Key words: structure of economic growth rates, Solow residual, total factor productivity, terms of trade, state of market.

JEL-codes: O47, E32.

Statistical Discrepancies in the Value of Non-resource Non-energy Exports from Russia to the EAEU

Elena A. Rozhanskaia – Associate Professor at the International and Customs Business Department of the Plekhanov Russian University of Economics, Candidate of Economic Sciences (Moscow, Russia).

Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Anastasiya A. Prikladova – Associate Professor at the International and Customs Business Department of the Plekhanov Russian University of Economics, Candidate of Economic Sciences (Moscow, Russia).
Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Exporting of non-resource non-energy (NNE) goods is important for the Russian Federation. Thus, the state should competently organize and implement support for such supplies. For this, an important factor is an availability of reliable information about commodity flows with foreign trade partners. Due to the strategic interests of Russia and the current political situation, mutual trade with partners in the EAEU has been conducted. The analysis of the Russian NNE is carried out for the period 2016–2020 based on “mirror” statistics of commodity flows with the EAEU countries. According to the results, there were defined the impact of the COVID-19 pandemic and the world commodity markets conjuncture on the NNE dynamics and the differences in the indicators of export-import operations.

A matrix of negative gaps, like M < X, was constructed with division of countries and product groups. Conclusions are about the importance of the partner economies integration, such as Russia’s ties with Belarus, and the regulation and control over the commodity flows accounting. It was suggested that control over foreign trade operations in the EAEU partner countries should be strengthened. It might be expedient to equalize business conditions, which would contribute to increasing the transparency of trade and generally have a favorable effect on the foreign economic activities of the participants.

This study was financed by a grant from the Plekhanov Russian University of Economics.

Key words: non-resource non-energy export, EAEU countries, statistical discrepancy, «mirror» statistics.

JEL-codes: F14, F15, M21, L50.