Russia's economy is growing despite sanctions

Russia's economy is growing despite sanctions

Western sanctions are having an increasingly noticeable impact on the Russian economy, although growth is still being recorded. Russia boasts economic growth of 3.6 percent, with forecasts for 2024 showing strong predictions of stronger growth compared to the West. According to the International Monetary Fund (IMF), the Russian economy is expected to grow by 3.2 percent in 2024, which is still solid growth despite a decline compared to last year. In contrast, the IMF only forecasts growth of 0.2 percent for Germany over the same period.

Stable oil export revenues play a crucial role in supporting the Russian economy, with President Putin having found ways to circumvent the impact of sanctions. By using a shadow fleet, Russia was able to successfully export oil to the West despite the sanctions. In addition, investments by private and state-owned companies as well as robust private consumption are helping to support the Russian economy.

With regard to global economic performance, the IMF emphasizes that it is overall resilient and has managed to avoid a recession. The West is weakening compared to other regions, with Europe and the United Kingdom showing significantly lower growth compared to Russia.

Despite the expected economic growth, further challenges must be expected in Russia. Some experts warn about unsustainable spending on war and emphasize the costs of evading sanctions. Furthermore, recent developments show that Russia's trading partners are becoming increasingly cautious, which creates additional uncertainties for the Russian economy.