Unpredictable growth: Tatarstan’s GRP grew more than planned
Despite a decline in the industrial production index and the fall in mining, Tatarstan's economy is growing in 2024, ahead of forecasts. By the end of the year, the gross regional product should reach 5 trillion rubles, which is almost 1 trillion more than the authorities announced in December 2023. The republic's GRP will grow this year by 3.6% in comparable prices compared to last year. However, for next year, the Tatarstan government continues to adhere to last year's cautious strategy and plans for growth of 2.9%. Read about the reason for the region's economy growth and whether we should expect a slowdown in its growth in 2025 in a review of the analytical staff of Realnoe Vremya.
A trillion more than planned
By the end of 2024, the gross regional product (GRP) of Tatarstan will reach 5 trillion rubles, increasing from 4.1 trillion a year earlier. The region's economy will grow by 3.6% in comparable prices compared to the previous year. Such data were presented at the annual address of Rais of Tatarstan Rustam Minnikhanov.
These figures significantly exceed the forecasts made by the authorities of the republic in December 2023. It was assumed that the GRP in 2024 would amount to 4.02 trillion rubles and in comparable prices would grow by 2.2% compared to 2023. There was no talk of reaching the level of 5 trillion even by 2026. According to forecasts, in 2025, GRP was supposed to grow by 4.4% — to 4.4 trillion rubles, and in 2026 by another 2.3% — to 4.6 trillion rubles.
In early September 2024, speaking at a meeting in the Cabinet of Ministers on the forecast of socio-economic development for 2025-2027, Tatarstan Minister of Economy Midkhat Shagiakhmetov noted that growth compared to 2023 had already amounted to 2.8%.
“In the context of unprecedented sanctions and current restrictions, enterprises and organisations of the republic continue to develop their production, maintain high investment activity, restructure logistics and sales markets, and implement import substitution projects,” Midkhat Shagiakhmetov stressed.
Today, the final data on the socio-economic development of Tatarstan for eight months of 2024 is publicly available. The republic is showing growth in most parameters.
Among the negative factors for the region's economy, one can note, firstly, a decrease in housing delivery (-2.7%) — to 2,796.800 sq. m, which is a consequence of the cancellation of mass preferential mortgages since July and a significant increase in the cost of lending for developers against the backdrop of a sharp increase in the key rate of the Central Bank of the Russian Federation; and secondly, a decrease in freight turnover of motor vehicles (4.9%) — to 9,100.1 million tonne kilometres, which may indirectly indicate problems in the field of trade and logistics.
The industrial production index in the republic is 101.6%: in the manufacturing industry it reached 104.4%, and the region's mining industry, continuing to experience the pressure of sanctions, decreased by 3.5% compared to the same period last year.
The volume of shipped goods of own production, works and services increased by 19.7% over eight months — to 3.5 trillion rubles. The turnover of organisations increased by 18.3% — to 7.7 trillion rubles. The volume of work performed in construction increased by 19.1% — to 477.2 billion rubles. Retail turnover increased by 10.2% — to 1.03 trillion rubles. Agricultural output increased by 0.1% — to 195.2 billion rubles.
Not the time for optimism
In 2025, Tatarstan's GRP, according to preliminary forecasts, will grow by 2.9% in comparable prices compared to the previous year, in 2026 — by 2.6%, and in 2027 — by 2.5%.
Taking into account the implementation of enterprise plans, the industrial production index is forecasted at 103.1% in 2025, 102.3% in 2026 and 102.5% in 2027, the minister of economy of Tatarstan noted earlier.
According to the forecast, agricultural production in 2025 will amount to 100.8% in comparable prices compared to the current year. In 2026-2027, the growth rate of agricultural production, according to the industry state program, is envisaged at 101.3%. Retail turnover is forecast at 103.1-103.6%.
The volume of construction work is forecast at 102-104%, taking into account the planned volumes in housing, industrial and infrastructure construction. The forecast in housing construction provides for the commissioning of 9.4 million square metres of housing in 2025-2027.
The implementation of investment projects is one of the main factors in ensuring the forecast for socio-economic development. In 2025-2027, the economy and social sphere of the republic plans to attract investments in fixed assets in the amount of 4.9 trillion rubles.
What influenced growth in 2024?
In Russia as a whole, the economic situation differs from forecasts, with regions showing different results under the pressure of sanctions and macroeconomic challenges. Tatarstan, in particular, stands out for its high growth in the processing industries thanks to import substitution programmes and public investment.
It is expected that in 2025, economic growth may slow down due to an increase in the key rate, which will make loans more expensive, limiting investment activity and consumer demand. If rates remain high, a decrease in economic growth is possible both in Tatarstan and throughout Russia, since lending to businesses and large projects will become less accessible.
“In Russia, the economy is growing really above forecasts, or rather, forecasts are increasing as things go along. And what's more, this year, as we have already discussed, part of the economic activity due to the tax reform from the beginning of next year will move to the fourth quarter of this year, or, as they say now, ‘shift to the left,’ so accordingly, the economy will grow, all other things being equal, more this year and less next year,” Tabakh explained.
“The pace of economic growth will slow down next year. There are already the first signs of this slowdown. But at the same time, we must understand that we are not talking about a precipitous decline. The economy is quite inert. But nevertheless, we will feel all this, including in the labour market,” the economist summarised.