The Russian economy will keep growing steadily in 2024, the head of the IMF’s European Department has predicted.
Speaking at a press briefing following the release of the agency’s latest European Economic Outlook, Alfred Kammer noted the resilience of the Russian economy in the face of the wide-ranging sanctions.
“What we have been forecasting for Russia is actually growth this year, and we also have seen quite strong growth last year, that was explained by economic activity that has remained strong because oil export volumes remained while prices were high,” the analyst stated.
According to Kammer, the country has been enjoying a rebound in consumption, growth in real wages and a strong labor market. He noted that much of the economic growth can be explained by a “boom in investment” in state-owned enterprises, particularly those in the security and defense sectors, as well as a surge in investment related to import substitution.
“There is not much support from the fiscal side, but it was there as well. Most of the fiscal support was lent to security and defense. So that explains also the upgrade of our numbers for 2023 for Russia and the growth outlook for this year,” Kammer concluded.
Earlier this week, the IMF once again upgraded its growth estimate for the Russian economy, expecting the country’s GDP to expand by 3.2% this year, up from its January projection of 2.6%. Its latest projections put Russia ahead of a number of major Western economies in terms of growth this year, including the US (2.7%), UK (0.5%), France (0.7%), and Germany (0.2%).
Russia’s Economy Ministry expects GDP growth this year to come in at 3.6%, the same as last year.
Many analysts have attributed the resilience of the Russian economy in the face of Western sanctions to its swift pivot to the East for trade and the economic policies implemented to offset the effect of the restrictions.
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