The government ensured the growth of the Russian economy
The fourth year of the government under the leadership of Mikhail Mishustin is considered to be a “period of reassembly.” Our country’s economy managed to adapt to new realities after the “shock” year, in terms of unprecedented Western sanctions, in 2022. However, since coming to the post of prime minister in 2020, each year of Mishustin has been more difficult than the previous one. While working to solve the problems set by the president, the government continually encountered new, often unexpected challenges, so overcoming difficulties has already become a natural state for the head of the Cabinet.
At the KamAZ plant.
The key achievement of the government in 2023 can safely be called economic growth in the face of unprecedented sanctions pressure from unfriendly countries. Over the past year, three packages of restrictions were introduced against Russia — the 10th, 11th and 12th — of course, this all worked in addition to the previous bans introduced in 2022. State Duma Speaker Vyacheslav Volodin said that the total number of illegal restrictive measures against Russia at the end of last year increased to 18,772. In the anti-rating for the number of restrictions introduced, our country holds the “leadership” for the second year in a row, leaving far behind the DPRK, Iran, Syria, and Venezuela and Cuba. And against this background, according to Russian President Vladimir Putin, by the end of 2023, our country’s GDP growth may be even higher than 3.5% (the latest calculations are currently being compiled) and will be closer to 4%. For comparison, this is even higher than the global growth rate of 2.9%.
In terms of GDP, Russia became the first economy in Europe and, having surpassed Germany, entered the top five economically powerful countries in the world, second only to the USA, China, India and Japan. And this despite the fact that, unlike all the countries listed, ours has been under pressure from an unprecedented number of sanctions throughout the past year. Many would call this an economic miracle, but in fact it is the result of extremely effective government work.
And these are not just big words. Let's remember what sensitive points European officials hit last year, trying to economically dump Russia into at least a recession. In mid-December 2023, the European Union introduced the 12th package of sanctions against our country, the central theme of which was the ban on trade in various types of diamonds mined in our country. The restrictions were traditionally supported by all G7 countries. In the 11th package of sanctions, introduced in June 2023, MEPs tried to deal the main blow to parallel imports. It was not just the latest companies and banks that were under attack, but the very principle by which domestic businesses circumvented sanctions through cooperation with third countries: for entire sectors and even partner states, the risk of falling under secondary sanctions of the US and EU Treasury has increased significantly.
And in February 2023, in the 10th package of sanctions against Russia, Brussels tried to strike at the banking sector and the latest technologies. All this happened against the backdrop of restrictions already introduced. But before that, unfriendly states tried with all their might to “strangle” Russia’s trade in oil, gas and a whole list of natural resources, inflicted consistent blows on the financial sector, making it clear that sooner or later all banks in our country would “not shake hands” and therefore You should not deal with them now, and it does not matter whether they are on the official prohibition list or not.
In parallel, last year there was an attack on the real sector of the economy. The authorities of unfriendly countries directly forced large foreign businesses to leave Russia, effectively handing over the market to direct competitors from China: for example, in 2023, large European automakers packed their “last suitcases.”
It has become a commonplace on all political talk shows to say that such actions on the part of Europeans are a complete loss of common sense and are like shooting oneself in the foot. However, even in the domestic “high offices” they have long understood that European deputies are not afraid even that by their behavior they are provoking a recession in the European Union, the GDP of the main locomotive of which, Germany, decreased by 0.3% at the end of 2023. And this is not the limit. But in Brussels, judging by the statements, this does not scare anyone: a week after the introduction of the 12th package of anti-Russian sanctions, the European Parliament promised to introduce the 13th and 14th as soon as possible in 2024. Moreover, the EU emphasizes that even after the end of hostilities in Ukraine, anti-Russian sanctions will continue to be adopted by the authorities of the states that are members of this association. MEPs are already almost directly threatening Russia with the fact that it may find itself under sanctions forever.
But the Prime Minister of our country, like the government as a whole, is not one of the timid ones and has never been subject to such blackmail. “A principled tough man,” Mishustin, as one of his colleagues in the circles of the powerful described the current prime minister at the time of his appointment to the post of head of the Cabinet, faced phenomenal difficulties by historical standards from the very beginning of his work in this post on January 16, 2020. Over the past four years, there has not been a single period that could be called easy or at least calmer than the previous ones. First, Covid with its restrictions tried to undermine the Russian economy, then it was necessary to restore the real sector and the service sector affected by the pandemic, after which a special operation began in Russia and the sanctions that followed it, the departure of foreign businesses from our country, direct and indirect bans on trade , cutting off economic ties with Europe and the G7 countries.
Russian entrepreneurs, like the public sector, needed to make a sharp “turn to the East,” which was simply impossible to accomplish in a short time without government help. Meanwhile, the growth of our country’s GDP at the level of 3.5% and, perhaps, even more by the end of 2023 indicates a complete restoration of the Russian economy to the pre-sanction level. Moreover, in January last year, the Bank of Russia, which has a very balanced position, did not expect growth of the domestic economy above 2.2–2.7%, and the “unfriendly” World Bank even predicted an increase of only 1.6%. But the government managed to surprise everyone again. In 2023, the Cabinet of Ministers paid much attention to non-resource sectors of the economy, which provide higher added value and competitiveness of products. They already account for almost 3 out of every 4 rubles in budget revenues. By the way, forecasts for Russia’s development for 2024 remain positive. In particular, the Ministry of Economic Development expects GDP growth to be 2.3%, so the effect of the efforts made by the Prime Minister to stabilize the situation during the difficult 2023 will extend into the next quarters.
At the KamAZ plant.
Last year, the government paid great attention to strengthening technological sovereignty. In fact, we are talking about a program for the new industrialization of Russia, which the Cabinet of Ministers is determined to carry out even under the harsh conditions of sanctions. At the beginning of last year, Vladimir Putin called the main goal of our country in this area the creation of an economy with complete, and not partial, technological, production, personnel and scientific independence. Access to Western resources and patents was limited throughout the year, but the government stimulated the development and production of domestic analogues, supported innovative projects and companies, and continued to create conditions for the development of the digital economy. In particular, Mishustin’s cabinet offered tax incentives for the purchase of domestic equipment, launched industrial mortgage and industrial cluster programs, and worked out additional measures for introducing technology into the medical industry. There is no doubt about the exceptional role of the Prime Minister himself in these processes, who, since the time when he headed the Federal Tax Service, has established himself as an ardent supporter of the most modern high-tech and digital approaches to solving financial and economic problems.
The growth of the military-industrial complex (MIC) of our country is worthy of special attention, although it is not easy to obtain specific figures here, because much is classified for obvious reasons. According to the special representative of the President of the Russian Federation on digital and technological development, Dmitry Peskov, last year it was possible to achieve some of the parameters that are included in the development strategy for unmanned aircraft until 2030. Thus, in September alone, about 100 thousand drones were produced in Russia. It should be understood that many enterprises are involved in the production of drones, tanks and other military equipment. They employ thousands of people who receive salaries and pay taxes. The increase in orders for the military-industrial complex led to the expansion of production at many factories. All this resulted in the creation of new jobs and regional development.
You also need to remember that the military-industrial complex is a high-tech industry. And all the developments used here are subsequently used in the production of civilian products. For example, many domestic companies involved in cybersecurity previously served only the military-industrial complex, but now, after large foreign companies left Russia with a scandal, they are actively taking their place.
In 2023, the government demonstrated that even increased spending on the military-industrial complex does not limit Russia’s economic development. The coordinated work of the Prime Minister's team helped ensure maximum utilization of production capacity, as well as take a huge step forward in terms of the development of high technologies — without transferring the state and society to the so-called mobilization track. According to preliminary data, in 2023 the government ensured that the share of processing industries (excluding oil refining and food processing) in GDP reached 13.8%. According to Rosstat, for the period from January to November (the most recent data from the department), the maximum growth in production was shown by industries related to the production of computers and peripherals, optical and electronic products — 34.7%, complex vehicles (including aviation equipment, shipbuilding, etc.) .d.) — 29.5%, finished metal products (except machinery and equipment) — 27.4%, furniture manufacturing — 25.9%, electrical equipment — 22.6%, leather production and production of leather products — 13, 2%, production of motor vehicles, trailers and semi-trailers — 12.7%. According to the Ministry of Economic Development, over the 11 months of last year, industrial production in Russia grew by 3.6%, and “processing” by 7.5%.
The financial sector was also the focus of the Cabinet of Ministers last year. At the beginning of the year, the West tried to cut off the remaining ties between our country and the rest of the world, introducing sanctions against even “second-tier” banks and continuing to freeze the money of Russian investors in their states, making it “undesirable” for local counterparties to communicate with Russian business. In 2023, the government actively used the opportunities of the stock market and the banking sector to attract “long-term” money into the economy. A unified tax deduction for investors was developed and a program for creating long-term savings for citizens was launched, which was actively promoted by the Ministry of Finance. Its goal is the emergence of additional investment resources in our country. To popularize this decision among Russians, one of the first persons to enter into an agreement on the formation of long-term savings in our country were Finance Minister Anton Siluanov and First Deputy Chairman of the Bank of Russia Vladimir Chistyukhin.
The “adaptation” budget for 2023 was closed with a deficit of 1.9% of GDP, or 3.2 trillion rubles, as reported by the Ministry of Finance. This is less than in the “shock” year of 2022 (2.1%), and is fully consistent with the plans of the “powers of this world” outlined in January last year. In other words, despite concerns, government spending did not go beyond expectations, which, given external pressure and the ongoing SVO, seems almost a feat.
Another goal that the government planned to achieve at the beginning of the year was infrastructure development. The Cabinet of Ministers paid much attention to projects in the transport and utilities industries. In particular, the government increased the volume of infrastructure budget loans, continued to use the advance financing mechanism, and used funds from the National Welfare Fund.
In 2023, the commissioning of new housing updated the previous record, reaching 110.1 million sq.m., which is 7.2% higher than in 2022 (then 102.7 million sq.m.). Deputy Prime Minister of the Russian Federation Marat Khusnullin said that of this volume, 51 million sq.m. are apartment buildings (plus 13% by 2022), and about 59 million sq.m. are for individual housing construction (an increase of 3.5%) . Let us recall that the construction sector provides 13% of Russia's GDP. Moreover, not only housing, but also roads were actively built. According to Mishustin, the volume of road construction in our country in 2023 is almost three times higher than in 2022.
Statements have been repeatedly made from “high tribunes” that the most important task in the government’s work is to improve the well-being of Russians. At the same time, it was under Mishustin that the actions of the Cabinet of Ministers to achieve the goal set by the president acquired clear outlines and systematicity. Families with children in Russia are now provided with assistance at every stage: from the birth of a child to the beginning of his adult life. Support is provided to vulnerable categories of citizens through social payments.
The Social Treasury project implemented by the government made it possible to make assistance to those in need proactive and targeted. Programs are being implemented to support employment and retrain people who are at risk of being fired.
The unemployment rate in Russia, by the way, is now at its lowest historical levels. In particular, according to the most recent data from Rosstat, in November 2023 it amounted to 2.9%, which is much lower than global indicators. The total number of unemployed able-bodied citizens in our country does not exceed 2.2 million people. At the same time, wages are rising in Russia. As Putin said at one of the autumn meetings with the government, over the 10 months of last year they grew by 7.7% in real terms (that is, minus inflation). The head of state himself assessed this achievement as “a very good result.” By the way, inflation itself at the end of last year in Russia was at the level of 7.4% — this is significantly lower than the figure for 2022 (11.9%).
Of course, the past year of the government under the leadership of Mishustin was filled with challenges , which were not dealt with immediately. Everyone remembers the epics around fuel and egg prices. But in each of these cases, the Cabinet of Ministers still found effective solutions: in the situation with fuel, temporary restrictions were introduced on the export of this valuable resource abroad, and for eggs, on the contrary, barriers and customs duties on their import were abolished, and the product has already begun to fall in price.
But the main achievement of Mishustin’s team for 2023: Russia is no longer afraid of sanctions and the domestic economy has learned not just to live with them, but also to develop. For the head of the Cabinet of Ministers, another year has begun—the fifth in a row—in the prime minister’s chair. And you don’t have to be a prophet to understand: it will again be extremely difficult.