Why did initial estimates get Russian economic performance so wrong?
Solanko, Laura (20.12.2023)
JulkaisusarjaBank of Finland Bulletin. Blog
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi-fe20231221156805
Back in March 2022, it looked like a full-blown financial crisis was in the making in Russia. Due to unprecedented economic sanctions, the ruble was in freefall, the Russian stock market had crashed and households were rushing to withdraw their remaining bank deposits. During the early months of Russia’s invasion, most economists expected the ensuing financial market shock, coupled with restrictions on foreign trade, to suppress Russian economic activity by as much as ten percent. The outcome, however, turned out to be much more benign. While economic activity as measured by GDP contracted by 5 % year-on-year in April-June, it declined much less than initially expected for 2022 overall. Did this outcome somehow demonstrate that the Russian economy was more resilient than we thought? To be succinct, no.
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