OREANDA-NEWS In the medium term, the Russian economy may face the same risks as Iran, whose GDP continues to be under pressure from large-scale international sanctions. Among the main vulnerabilities, analysts at the Institute of Economics of the Russian Academy of Sciences included the threat of stagflation, budget incentive traps and the negative consequences of the "resistance economy," RBC reports.
Experts predict the continuation of the stagnation trend with a negative trajectory combined with high inflation for the Russian economy. In the future, the country's GDP will continue to remain isolated from leading global markets, combined with a drop in productivity and an increase in government spending to overcome the crisis. Against this background, it will be extremely difficult to achieve sustainable growth of the national economy.
Taking into account the systemic sanctions, government demand in the form of orders, purchases and investments will remain the main driver of the growth of the Russian economy. However, continued reliance solely on fiscal stimulus will prove extremely vulnerable, experts warn. In this scenario, the priority sectors of the economy will receive more investment injections than the rest, and the overall increase in government spending will not allow us to count on a significant increase in state support on a stable basis.
Analysts called the negative consequences of the so—called resistance policy pursued by the local authorities - by analogy with Iran - another risk for the Russian economy. Among the main threats from such a course, experts called the inability to move away from raw materials specialization due to technological limitations, as a result of which an increasing number of enterprises will use outdated equipment. The emphasis on the diversification of exports from West to East makes the Russian economy dependent on demand from Asian countries. "The Eastern partners pragmatically use the fact that the new markets are needed by the sub—sanctioned economy more than they need it," the RAS experts concluded.
Earlier, Russian Presidential spokesman Dmitry Peskov said that since the beginning of large-scale international sanctions, Russia had to mobilize all available resources to prevent the collapse of the economy. At the same time, he noted that "no country in the world would theoretically be able to withstand such a blow." At the same time, Peskov complained about the insufficient growth rates of the Russian economy (GDP is expected to increase by three percent by the end of 2023) against the background of external pressure.
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