UN says Russian economy shows better-than-expected results in 2022

GENEVA, Jan 26 (PRIME) -- Russia’s economy decreased by around 3.5% in 2022 as compared with an expected fall of 15%, the U.N. said in a World Economic Situation and Prospects (WESP) report late on Wednesday.

“Initial estimates had predicted a 10% to 15% contraction in the Russian economy but it contracted by just around 3.5% in 2022. Export earnings remained strong. High inventory levels, stockpiled amid pandemic-related supply chain disruptions and increasing uncertainties, allowed many firms to maintain production in the second and third quarters of the year despite sanctions,” the U.N. analysts said.

“Increased military expenditure, while not contributing to living standards or sustainable development, also statistically added to gross domestic product (GDP). Some industrial sectors shrank considerably, however. For example, automotive industry output decreased by around 80% in 2022,” they added.

The U.N. attributed the dynamics to Russia’s massive current account surplus, the continued stability of the banking sector and the reversal of initially sharp monetary tightening.

According to the report, the crisis has also strongly impacted the CIS and the EAEU economies.

“The (crisis) is affecting the entire CIS area, especially members of the Eurasian Economic Union. In the longer run, the lower potential growth of the Russian economy would involve serious costs for those economies,” the U.N. said.

End