“If the economy is overheated to a certain extent, this can be dealt with by increasing production, or by curbing demand. And if we’re going to try to curb demand, we need to avoid a hard landing—the cessation of growth in the first quarter of 2024 and the next year’s GDP growth of approximately 0.5-1.5%,” Belousov said in an interview with Kommersant.

The Deputy Prime Minister indicated that a hard landing would lead to a reduction in investment in import substitution, as a result of which the cost of imported goods would begin to rise. “Demand, of course, is shrinking, but production is also stopping. The economy, of course, comes to an equilibrium point, but only this will be zero growth or 0.5% GDP growth, a reduction in imports, and a return of unemployment to 4%. The soft way out is to support, first of all, import substitution and reorientation of exports to new markets that are emerging in 2023, at least to protect this,” he added.

As an example, Andrei Belousov pointed to the measures taken by the Bank of Russia to support small and medium-sized businesses, in particular the preferential lending program. He expressed hope that similar conditions will be created for export. “The fork in the road now is either a hard landing or a soft landing, with the processes of import substitution and export being maintained in the first place, while investment continues to grow at an accelerated rate of 3-4% per year,” he concluded.