MOSCOW, January 12. /TASS/. In its assessment of the dynamics of the Russian economy in 2022 the World Bank overestimated the effect of the oil price cap introduced in December, as well as European embargo on offshore supplies of Russian oil, First Vice President of the Center for Strategic Research Gleb Pokatovich told TASS.

Analysts at the World Bank projected a 3.5% decline in the Russian economy last year, emphasizing that this is a greater decline than the pandemic-related recession of 2020, as falling wages have undermined consumer spending and investment has been curtailed by foreign sanctions. Oil output was also higher than planned, owing to rerouted exports. Analysts noted, however, that the support of the ruble exchange rate has helped restrain inflation and real income losses.

"The current World Bank assessment of the dynamics of the Russian economy in 2022 appears very conservative and probably overestimates the effect of the December introduction of the price cap and the European embargo on offshore Russian oil supplies," Pokatovich said in response to the World Bank estimates. "In the fall, most experts expected that Russia's GDP would decline by no more than 3%, and as we approached the end of the year, these forecasts improved as statistics were released. Back in October, the IMF gave a forecast that was just 0.1 percentage points higher than the current data from the World Bank," he added.

According to the expert, the general uncertainty of economic prospects is also reflected in the comments of the report’s authors, who, for example, find arguments both supporting the fact that the decline in Russian exports will be lower than expected, and supporting the opposite.

"Apparently, the forecast for a decline in investment in 2022 will not come true - over three quarters they grew by 5.9% in annual terms and may remain in the positive zone at the end of the year," Pokatovich added.

In 2023, the World Bank expects Russia's GDP to contract by 3.3%, while 1.6% growth is expected in 2024, with a modest increase in consumption and a recovery in exports as Russia redirects its trade connections.

"For 2023, the World Bank gives a restrained forecast for Russia, which generally fits into the range of existing estimates - according to the official forecast of the Russian Economic Development Ministry, GDP will decrease by 0.8%, while the Bank of Russia expects a GDP decline of 1-4%, rating agency ACRA - 2.8%," the expert noted. According to him, some analysts suggest that the decline could reach 5% or more.

Russian presidential spokesman Dmitry Peskov said on Wednesday that Russia has not yet experienced the impact of the oil price cap, and the Kremlin is skeptical about the attempts to calculate its losses. He commented on the data from the Center for Research on Energy and Clean Air (CREA) that the restrictions imposed by the West on Russian oil allegedly cost Moscow 160 mln euro per day.

Peskov added that it is too early to draw conclusions about the impact of the Western-imposed price cap and "there is no evidence to support such conclusions." He recalled that Russian President Vladimir Putin signed a decree on retaliatory measures to the oil price cap for Russian oil.

On December 5, an embargo on maritime Russian oil shipments to the European Union came into force. Moreover, EU states also agreed on a price cap for Russian oil delivered by sea, setting the ceiling at $60 a barrel. A similar decision was announced by the G7 and Australia. The West is also banning its companies from providing transportation, financial and insurance services to tankers carrying oil from Russia at a price above the agreed-on ceiling.

On December 27, Russian President Vladimir Putin signed a decree imposing retaliatory measures in response to the West's imposition of a price cap on Russian oil, prohibiting supply to buyers who have joined the restrictions since February. At the same time, the president reserved the right to make extraordinary decisions on the supply of oil and petroleum products, the implementation of which is banned by this decree. Russia’s Ministry of Energy has been tasked with overseeing the ban's implementation. The agreement takes effect on February 1, 2023, and will be active until July 1, 2023.