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Analysis of key factors determining the prospects of the Russian economy, and forecasting the macroeconomic situation

Priority areas of development: economics, management
2020

Goal of research

The goal of the research is analysis of the macroeconomic conditions in Russia, the key factors determining Russian economic prospects, and development of the short-, mid- and long-term economic forecasts.

Methodology

The research methodology includes statistic and econometric methods, surveys conducted among macroeconomic forecast experts, analysis based on the developed by Development Center Institute composite indices system anticipating economic dynamics by 1-2 quarters. Mid-term forecast is based on the multidimensional macroeconomic model allowing for economic simulation modelling, revealing macroeconomic bottlenecks and estimating the effectiveness of the public policy measures.

Empirical base of research

The informational base of the research includes the open data sources provided by Federal State Statistics Service of Russia, Bank of Russia, Ministry of Finance of Russian Federation, Russian Federal Treasury, Federal Tax Service of Russia, Federal Customs Service.

Results of research

The research results include the following:

Some contemporary approaches to the short-term GDP forecasting were considered. The main attention was paid to the methods used by ECB, including technical details. Future research can include wider list of the forecast methods under consideration by regarding other organizations’ experience. Anyway the current methods list allows making an enough clear concept about opportunities for getting short-term estimates of GDP in Russia.

In the future research the first edition of the model estimated by its forecasting features can be updated using more complicated tools.

Daily economic stress index (DESI) research has the following results.

The indicators with most sensitivity to the cyclical recession were selected.

Special seasonal and calendar adjustment procedures were developed.

Program modules supporting automatic daily renewal of the databases were developed.

The review of the approaches to index components aggregation was made; as the most adequate method the signal approach was selected.

For every component a special series transformation was developed; such a transformation allows comparing the series values to a certain threshold value to catch an “alert signal”. In a case when such a signal appears, a special binary variable takes the value 100; elsewise it is equal to zero.

Final aggregated DESI is calculated as a simple arithmetic mean of the aforementioned binary variables.

It is shown that during the recession periods DESI takes high values, signalizing about the recession beginning actually in the real-time mode; it is a remarkable advantage of the index compared to other indicators with monthly or quarterly periodicity and large publications lags.

Methodical papers with the complete description of the DESI calculations procedure are developed and published in the Internet.

DESI has been tested for last 9 months, and no significant shortcomings are still found.

Level of implementation, recommendations on implementation or outcomes of the implementation of the results

Practical importance of the research includes the possibility to use the research findings in preparing regular informational and analytical reports, addressed to interested organizations Commentaries on forecasting social and economic development of Russia, Federal budget Law project, projects of Guidelines for the Monetary Policy of the Bank of Russia, and recommendations addressed to President, the Government and the Bank of Russia. The results can be implemented for informational, expert and analytical support of Government and Bank of Russia on economics and economic policy questions.