The economy defied fears of a recession and previous predictions that it would contract by more than 12 percent.
Russia’s economy contracted by 2.1 percent last year, the federal statistics service said on Monday, shrinking less than expected despite its invasion of Ukraine last February and sanctions imposed by European nations and the United States.
Rosstat’s first gross domestic product (GDP) estimate for 2022 was a marked improvement on forecasts made soon after the conflict began. In 2021, the economy saw a 5.6 percent year-on-year rise.
The economy ministry had at one point predicted a contraction of more than 12 percent last year, exceeding the falls in output seen after the Soviet Union collapsed and during the 1998 financial crisis.
In April 2022, the World Bank predicted a contraction of 11.2 percent.
“Due to its invasion of Ukraine, Russia faces the largest coordinated economic sanctions ever imposed on a country,” the World Bank said in a statement.
“Russia’s economy will be hit very hard, with a deep recession looming in 2022. GDP is expected to contract by 11.2 percent, with little recovery in the ensuing two years,” it added.
Before the conflict in Ukraine began, the Russian government had expected GDP growth of 3 percent in 2022.
Manufacturing industries and wholesale and retail trade were among the sectors that declined in 2022, while agriculture, hospitality, construction and mining all registered growth.
Public administration and “military security” gained 4.1 percent in 2022, the statistics agency said, adding to a 3.3 percent rise in 2021. President Vladimir Putin in January paid tribute to the defence sector for supporting the economy.
Increased military spending is smoothing out a drop in the country’s industrial production, analysts say.
Net exports increased to 12.8 percent from 9.3 percent, “due to the prices of exported fuel and energy products being significantly above imports”.
Russia’s current account surplus hit a record high in 2022, as a fall in imports and robust oil and gas exports kept foreign money flowing in, despite Western efforts to isolate the Russian economy over the conflict in Ukraine with successive rounds of sanctions.
In January, the surplus shrank 58.2 percent year-on-year to $8bn, squeezing Russia’s capital buffers at a time when Moscow is ramping up budget spending.
The country’s central bank on Monday estimated the 2022 economic contraction at 2.5 percent.
Forecasts for 2023 are varied. The government expects a decline of 0.8 percent, while the International Monetary Fund believes the economy could grow by 0.3 percent as commodity exports have proved resilient.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
