Nobody knows. But when the official statistics show negative growth, it must be pretty bad.
From the FT:
Russia’s ailing economy has failed to recover even as rising oil prices during the war in the Middle East have boosted the Kremlin’s depleted coffers, according to Sweden’s military intelligence chief.
Thomas Nilsson, head of Sweden’s Military Intelligence and Security Service, told the FT that Russia would need prices for Urals crude, its main blend of oil, to remain above $100 a barrel for a year to close its budget deficit, and for significantly longer than that to smooth over its other economic problems.
…
Sweden had intelligence indicating that Russia was systematically manipulating data to fool Ukraine’s western allies into believing its economy had withstood the strain of its lavish war spending and western sanctions, Nilsson said.
See an earlier discussion of Russian manipulation of GDP statistics here.
In the face of the slowdown, the Central Bank of Russia has decreased the policy rate:
A simple calculation indicates 9% real interest rate (15% policy rate, 5.9% inflation rate through March, assuming expected equals lagged inflation). However, Nilsson believes the true inflation rate is more like 15%, so the inflation adjusted policy rate is essentially zero. The median year-ahead expected inflation rate from the Central Bank of Russia March inFOM survey is 13.5%, suggesting a slightly positive real interest rate.
Bofit’s forecast is for about 1% growth this year and half a percent next year. Since higher oil prices have boosted Russian revenues, they now estimate faster growth, with the extent depending on the duration of the elevated oil prices.
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