Russia’s economy is expected to grow by 3.2% in 2024, surpassing other advanced economies like the US, according to the International Monetary Fund (IMF). This growth is attributed to high investment and strong private consumption despite the ongoing war. However, the IMF forecasts a slowdown in growth in 2025, with a rate of 1.8%.
Russia’s significant economic growth is faster than that of major developed economies, putting it ahead of countries like the US, Germany, the UK, and Japan. These positive numbers are driven by high investment and robust private consumption, which have been supported by wage growth and a tight labor market. While expectations for 2025 are more moderate, the growth so far indicates some resilience in the face of sanctions.
The outlook for Russia’s economy poses a challenge to Western nations that have implemented sanctions to curb Russia’s actions in Ukraine. Vladimir Putin has touted the strength of Russia’s economy despite facing sanctions, and the country has managed to sustain its key energy exports. Additionally, Russia’s close partnership with China has continued to strengthen trade between the two countries, providing Russia with a lifeline amid Western sanctions. Trade volume between Russia and China reached a record high of $240 billion last year, further solidifying their economic relationship.
