Development of the Russian Economy in the Medium Term: Risks and Opportunities

Area of Science:

• Economics
• International Trade
• Economic Policy

Background:

• Deteriorating trade and economic relations with developed countries pose significant medium-term risks to the Russian economy.
• Restrictions on imported products were a primary driver of reduced economic activity in 2022.
• The Russian economy exhibits high dependence on imports and technological backwardness, constraining sustainable development.

Purpose of the Study:

• To examine the key risks to Russian economic development in the medium term.
• To describe critical changes in the national economy's operational model.
• To analyze the impact of sanctions on production, income, and prices.

Main Methods:

• Analysis of trade and economic relations.
• Assessment of the impact of import restrictions on economic activity.
• Examination of structural and technological restructuring under sanctions.

Main Results:

• Import restrictions emerged as the leading factor reducing economic activity in 2022.
• Sanctions are driving a structural and technological restructuring of the Russian economy.
• Potential compensation for sanctions involves replacing high-quality resources with mass ones.

Conclusions:

• Increased investment in production modernization and R&D is crucial for navigating sanctions.
• Addressing import dependence and technological backwardness is vital for future economic sustainability.
• The focus must shift towards qualitative economic growth in the medium and long term.