Import substitution contribution to Russia’s economic growth

Abstract

Import substitution becomes a hot topic in Russia every time world oil prices fall and the exchange rate of the ruble weakens. Since 2014, it has become a key area of state economic policy. Despite this, various indicators for assessing this phenomenon in the Russian economy have different trends and do not allow to make a clear conclusion about the results achieved. There is also no comprehensive assessment of the impact on economic growth. The paper analyzes approaches to the construction of relevant indicators, taking into account the model tools of the inter-industry balance, offers a macroeconomic method for decomposing GDP growth in the areas of its final use, with the allocation of the contribution of import substitution by increasing the availability of finished domestic products, and localization of production, domestic import substitution, and export-oriented one. Based on the results of calculating the corresponding indicators for 1996—2019, the conclusion is made about the significance of this factor for the dynamics of economic growth in Russia, especially in the periods of high volatility of economic environment. A deliberately high error of forecasts is noted when applying the traditional approach of GDP decomposition from the final demand side, which assumes the preservation in the short term of the proportions of consumption between domestic and imported finished products, materials and components.