The Ministry of Economic Development announced the forecast and scenario conditions that are possible for the development of the economy until 2024, and also calculated what the deflator indices will be for the next planning period.
Index deflators
Every year, the Ministry of Economic Development calculates forecast deflator indices for several years ahead (for example, forecasts up to 2024 and 2025 were presented in 2022). The price index (GDP deflator) is used to analyze the general price level, indicating the processes taking place in the country's economy.
An economic deflator index is calculated, like the Paasche index, but expressed as a percentage.
The application of such an analysis with a further probabilistic forecast is quite multifaceted. Thus, using the forecast of the Ministry of Economic Development, one can understand how the income of the population and the cost of the “consumer basket” can change until 2024 if the economy follows a favorable or unfavorable path of development. Based on the data provided by the inflation forecast from the Ministry of Economic Development, the social policy of the state for 2022-2024 is also planned.
Of course, forecasts do not always come true, since it is extremely difficult to predict absolutely all the factors that can have a favorable or, on the contrary, a negative merger on economic processes in the accounting period. It can be said that in 2022 they give a long-term forecast for 2023-2025, and what exactly will be inflation, the GDP ratio and other types of parameters indicated in the forecast, the updated forecast of the Ministry of Economic Development, which will be released closer to 2024, will say.
Development scenarios
The scenario conditions presented in 2022 by the Ministry of Economic Development were developed for the planning period 2024-2025 in two versions:
- Basic - the best option, in which the development of the economy occurs predictably along the existing trajectory, without sharp negative fluctuations;
- Conservative - a less optimistic scenario, in which the level of economic development decreases and inflation rises accordingly.
The Ministry of Economic Development of the Russian Federation did not present a third option with a frankly negative development of events in 2022.
Key factors affecting economic development in the coming years will be:
- oil price on the world market;
- sanctions pressure on Russia;
- decrease in export volumes;
- logistics of important supplies on which production is tied.
To understand what processes affect deflator indices, let's take a closer look at two scenarios presented by the Ministry of Economic Development for the period up to 2024-2025.
Basic Scenario
If, by the end of 2022, Russia is able to stabilize the economy, despite maintaining a fairly high level of inflation, and the price of Urals oil on the world market remains at $80 per barrel, then we can expect that by 2024 after 2- x years of decline, we will get, albeit small, but GDP growth, which should average 3.2%. At the same time, the dollar exchange rate will rise to 78.7 ₽, and the consumer price index, respectively, by 4%.
Conservative scenario
According to the conservative scenario, the ship of the economy may go in the event of a significant decline in prices for oil and domestic exports.Experts believe that the fall in oil prices can be predicted as a result of a slowdown in global economic growth, and a decrease in exports - as a result of increasing sanctions pressure on the Russian Federation.
If you look closely at the deflator indices, which the Ministry of Economic Development predicts until 2024 under a conservative scenario, it becomes obvious that the inflation rate will not reach the target level until the end of 2025. Also in this case, you can expect such negative events as:
- decrease in income
- growth of families from socially disadvantaged groups that may fall below the poverty line;
- fall in consumer demand;
- significant decline in exports and investment;
- instability of the ruble with a tendency to gradually weaken.
Comparison table
The official forecast of the Ministry of Economic Development until 2024, released in the second half of 2022, indicates the following main indices for the base and conservative scenario:
Download the official forecast from the Ministry of Economic Development, which was included in the order for 2021 with a calculation of what the deflator index will be in 2023, 2024 and 2025 for two options for economic development (basic and conservative).
Projected price increase
Given how the Ministry of Economic Development presents deflators in the period up to 2024, economists predict the following prospects for price growth in various areas:
| Indicator | 2024 |
| Gas | 7% |
| Electricity | 6% |
| Total payment for commun. services | 6.3% |
| Railway transportation of goods | 7.1% |
| Railroad passenger transportation | 4% |
Conclusion
Indices deflators are a basic indicator that not only the public sector is guided by, but also entrepreneurs conducting various activities. You can also read about how wages will grow when and by how much pensions and benefits will be indexed in 2024 on the pages of our website.
