Alexey Vedev: Household consumption was the main driver of Russia’s economic growth in 2023

"Dynamic growth in many sectors of the economy, reaching potential levels of economic growth with the maximum use of labor resources led to a noticeable increase in the income of citizens, who used these funds for consumption. Household consumption became the most significant source of economic growth in 2023. Thus, households did not "eat up" their last reserves, but chose a consumer model of behavior," the expert believes.

Alexey Vedev added that due to the stable exchange rate of the national currency in H1 2023 and overcoming technical problems, companies actively boosted imports of goods. However, the increase in imports had a negative impact on economic growth and exports. "Imports at the end of last year rose, which in terms of GDP had a negative impact on economic growth. Exports also made a negative contribution to GDP, which decreased mainly due to the sanctions pressure on the country's key export-oriented industries," the economist said.

Another important factor contributing to GDP growth, according to Alexey Vedev, was investments by companies. Despite the general economic downturn in 2022, many large companies managed to maintain positive figures and channel these funds into investments in 2023. "From the Rosstat data, we see that investments made a significant positive contribution to GDP growth, most of which was financed not from strategic reserves. The contribution of the public administration sector to the country's economic growth last year was much less significant, which can hardly indicate large-scale spending of state reserves in the period under review," the expert concluded.