MOSCOW, December 29. /TASS/. The Federal Statistics Service (Rosstat) raised its estimate of Russia's GDP growth for 2021 from 5.6% to 5.9%, and also improved its estimate of the decline in GDP in 2022 from 2.1% to 1.2%, according to the statistics service.

In absolute terms, Russia’s GDP at the end of 2021 amounted to 135.773 trillion rubles ($1.5 trillion) and at the end of 2022 it was 155.350 trillion rubles ($1.6 trillion).

"The adjustment of the GDP estimate for 2022 is due to obtaining the annual results of federal statistical observations, data from the annual budget (accounting) statements of the Federal Treasury. When performing calculations for 2021 and 2022, the preliminary results of the development of tables of resources and use of goods and services as part of the base input-output tables for 2021 were taken into account, updated data on industry statistics and balance of payments for these years," Rosstat said.

GDP in 2022

According to the Federal Statistics Service, the decline in GDP in 2022 relative to 2021 is due to a decrease in the foreign trade balance under sanctions pressure.

"Domestic final demand slightly increased (by 0.3%). Expenditures on final consumption remained virtually unchanged (-0.1%). Meanwhile, household expenditures decreased by 1.1% due to a decrease in demand for consumer goods. Expenditures of general government sector and non-profit organizations serving households increased by 3% and 0.7%, respectively," the statistical service noted.

The growth of gross accumulation (+1.3%) was due to the gross accumulation of fixed capital and valuables (+6.7%) with a reduction in the growth of inventories.

Compared to 2021, in the structure of GDP in 2022, final consumption expenditures decreased from 67.8% to 64.8%, gross capital formation decreased from 22.9% to 22.5%. At the same time, the share of net exports increased from 9.3% to 12.7%. Changes in the structure of GDP are associated with a significant increase in prices for exported fuel and energy goods, Rosstat added.

Also, according to the statistical service, GDP dynamics were influenced by a reduction in the index of physical volume of added value. This affected the sectors of wholesale and retail trade (-12.8%), water supply, sanitation, organization of waste collection and disposal, pollution elimination activities (-4.8%), as well as manufacturing (-2%).

Growth was observed in construction (+7.1%), agriculture (+7%), hotels and restaurants (+5.1%), information and communications (+0.9%), and mining (+ 0.6%).

GDP by source of income in 2022

In the structure of GDP by source of income in 2022 relative to 2021, the share of wages decreased from 40.4% to 38.5%, the share of net taxes on production and imports decreased from 10.0% to 7.7% due to a reduction in taxes on products and imports and the growth of other production subsidies (in terms of compensation for the costs of petroleum raw materials to oil refining companies), the share of gross profit increased from 49.6% to 53.8%.

GDP estimate for 3Q 2023

The Federal Statistics Service also presented the first estimate of GDP for the third quarter. The GDP volume in the third quarter of 2023 amounted to 44.151 trillion rubles ($4.9 trillion). The physical volume of GDP increased by 5.5% relative to the corresponding quarter of 2022.

The growth of the physical volume of GDP was affected by an increase in domestic final demand (+8.2%) with a decrease in net exports.

"Final consumption expenditures in general increased by 7.2% mainly due to household expenditures (+8%), expenditures of the general government sector increased by 5.4%, expenditures of non-profit organizations serving households did not change," the agency noted.

As for the structure of GDP by source of income, in the third quarter of 2023 compared to the same period in 2022, the share of wages increased from 38.3% to 39.2%, the share of net taxes on production and imports decreased from 7.3% to 7 .0%, the share of gross profit decreased from 54.4% to 53.8%.

On December 13, the Federal Statistics Service confirmed the estimate of Russian GDP growth in the third quarter at 5.5%. Rosstat also improved its preliminary estimate of GDP growth for the nine months of 2023 to 3%. Earlier, the statistical service preliminary estimated GDP growth for January - September of this year at 2.9%.

Russia's GDP for the third quarter amounted to 44 trillion 151.3 billion rubles ($493 bln). In comparison with the second quarter, GDP grew by 7.8%.

Comments from Economic Development Ministry

Director of the Department of Macroeconomic Analysis and Forecasting at the Russian Economic Development Ministry, Lev Denisov, said that the improved estimate of GDP growth for 2021 suggests that the economic recovery after the pandemic was even more confident than previously thought.

"Indicators for agriculture, construction, transport and other industries have been revised upward. What is especially important is that we have a broader picture for "non-basic" sectors of the economy - the tourism industry, IT and science showed even higher growth," Denisov noted, commenting on the improvement in estimates GDP for 2021 and 2022. He also added that these indicators show a more confident adaptation of the Russian economy to "unprecedented sanctions pressure" than previously thought.

In addition, the decisions taken by the President and implemented by the government worked, which was reflected in GDP indicators.

"First of all, this is a bet on private entrepreneurial initiative, supporting domestic demand and supply. Including new growth points - tourism and IT. The economy turned out to be more flexible, and with a greater margin of safety," Denisov added.

According to the official, new data from Rosstat suggests that the potential growth rates of the country's economy are higher than a number of experts believe.

"The current growth rates do not indicate an overheating of the economy, but rather a confident, sustainable development," he noted.