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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.