The Russian economy has grown record-breaking in nine months, HSE experts calculated. True, the records were formed mainly due to external demand for raw materials, including from China. And also on the wave of deferred demand and fears of Russians about the galloping rise in prices, add experts interviewed. The financial result of the Russian economy for the first nine months of this year turned out to be a record one. “In January-September 2021, the profit of Russian enterprises amounted to 19.6 trillion rubles. This is higher than the profit in the corresponding period of 2020 by 12.4 trillion rubles, or 175.9%, "- says the research of the Higher School of Economics, published on December 22.

Thus, the financial result of nine months exceeded the annual profit even in the pre-pandemic year of 2019, the HSE experts say.

Among the main reasons for the formation of such a solid financial result is the favorable price situation in the commodity markets. “In the extractive industry, profit is 130% higher than the result of the three quarters of last year. In the sector of mining of metallurgical ores, the profit growth was + 140%. Prices in the metal markets were growing, in particular, under the influence of the growth in demand for metals from China, ”says the HSE study.

Consumer boom and overheating

Another important factor in profit growth is the consumer boom, which arose as a result of the effect of deferred demand, as well as inflationary expectations of the population. “Counting on the rise in prices in the future, the population was actively buying expensive goods, expecting either difficulties with their purchase in the future, or hoping for the possibility of profitable resale in the face of increased prices,” the HSE experts note. Profits in the jewelry industry increased by 29.6%, in furniture production by 280%, and in leather goods production by 150%.

The pharmaceutical industry (growth by 140%) and oil refining (+ 200%) still felt confident. A very high increase in profit (+ 1470%) was recorded in the production of chemicals, which is associated with an almost twofold increase in prices for mineral fertilizers.

An increase in the financial result was also observed in agriculture (+ 44%). It is known about record yields of fruits and berries, about the very high quality of Russian wheat in 2021, the study specifies.

In construction, in January-September 2021, an increase in profits was recorded by 37.8%. “Rush demand for real estate was associated with the operation of the preferential mortgage program; the completion of the program reduced the demand for real estate in Moscow, however, in regions where real estate prices are lower, the dynamics of demand remained the same, ”the HSE experts note.

The leader in terms of profit growth is financial and insurance activities (3370%), which is associated with the growing popularity of insurance services.

Experts record losses only in the activities of land passenger transport (except for railway transportation), postal and courier activities, as well as in the traditionally non-profitable scientific, cultural and leisure sphere, in tourism.

With a successful combination of circumstances, profit in the real sector of the economy by the end of 2021 could reach a record 26 trillion rubles, the analysts of the tower conclude.

Catch up and overtake 2019

found out which trends of the record year 2021 will inherit the next year, 2022, and what will be their difference.

The year 2022, unlike the current one, is no longer considered "under the auspices" of post-pandemic growth, and its onset can be associated with continuing inflationary pressure, risks of exchange of sanctions and a pandemic, notes Associate Professor of the Department of Economic Theory of the PRUE. G.V. Plekhanov Oleg Cherednichenko.

“In this regard, it is possible to draw certain conclusions on the prospects for the development of a number of industries. The banking sector is likely to show a slowdown. The Bank of Russia regularly expresses concerns about the dynamics of the debt burden of Russian households, which means that new restrictions applicable to the retail lending market may follow in the coming year, ”Cherednichenko says.

The "fever" in the commodity markets is likely to continue. “This means that, at least in the first half of the coming year, the profitability of mining and processing companies will continue to demonstrate positive dynamics, and the impact of the new energy transition is unlikely to manifest itself in 2022,” says REU expert Cherednichenko.

At the same time, there is a risk of a slowdown in the growth of the Chinese economy. This cannot be ruled out from the second or third quarters of next year. And this will be a blow to the profitability of the energy sector, Cherednichenko said.

“Next year, we can expect a steady increase in profits in the oil and gas sector (oil production is gradually increasing with the growth of global energy demand and the softening of OPEC + quotas),” objected Olga Belenkaya, head of the macroeconomic analysis department at FG Finam. And the conjuncture of gas prices in Europe is developing very favorably for gas exporters.“Yes, in absolute terms, the financial result of next year may look even more bravura than in the end of 2021, but in addition to the real contribution of exports, everything else is purely inflationary pumping of indicators,” said Pyotr Pushkarev, chief analyst at TeleTrade.

We can confidently say that profits next year will be received by those sectors of the economy that realize the pending rush demand from wealthy citizens. Trying to save capital from inflation, they are ready to buy real estate, cars, jewelry ..., a new wave of boom may rise in these industries, says Pushkarev.

The service sector, passenger transport and non-food retail remains under the pressure of "antiquated" restrictions, and here the risks are associated with the discussed plan for the introduction of QR codes for visiting public places, as well as possible new non-working days, adds Finam expert Belenkaya ...

In construction (already this year, profit growth in this sector was weak against the background of an increase in spending on building materials and labor), next year an additional risk factor may be limited demand due to the expected slowdown in mortgage lending growth, Belenkaya predicts.

We are all - government spending

The record growth of Russia's GDP in nine months (4.6% y / y) is explained by high external demand, as well as higher than expected growth in budget spending by 10% and growth in retail loans by 24% year to year, says Natalya Orlova, chief economist at Alfa-Bank.

“This year was initially associated with the expectations of catching-up growth, but the speed of recovery has surpassed even the most positive forecasts. And, probably, by the end of 2021 it will amount to 4.3%, showing the strongest dynamics in the last 10 years, ”says Orlova.

Government spending made a significant contribution to economic growth. “Despite the government’s initial plans to reduce them by 5%, they have grown by 10% in nine months,” Orlova adds.

If on the threshold of this year the main attention of the authorities and experts was focused on the topic of economic recovery, then the 2022 agenda is fully shaped by fears associated with financial risks, the economist notes. “Inflation remains at the center of the economic agenda for 2022, and given the high entry point for prices, we raise the inflation forecast to 6%,” Orlova says, explaining this increase, among other things, by the weakening of the ruble and additional indexations of social spending.

The problem of industrial and economic growth in general next year "will be relegated to the background due to concerns about financial and geopolitical risks." And the GDP growth itself in 2022 will be 1.5%, the expert of Alfa-Bank concludes.

“In 2022, the economy will grow stronger than potential (2.8% according to our estimate), but overheating, as in the current year, most likely, will not happen either. Tightening monetary policy and a return to standard parameters of the budget rule will limit the expansion of domestic demand, ”says Evgeny Vinokurov, chief economist of the Eurasian Development Bank and the Eurasian Fund for Stabilization and Development.

The uncertainty of the development of the pandemic and the spread of the omicron strain of the coronavirus also remain a risk to the Russian economy. “At the same time, according to our calculations, the relationship between coronavirus outbreaks and the dynamics of economic activity has decreased with the course of the pandemic. People and business are adapting to the changed conditions, restrictive measures are of a more targeted nature, "Vinokurov concludes.

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