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 ongoing war. However, the IMF forecasts a slowdown in growth in 2025, with a rate of 1.8%.
Russia’s economic growth is faster than that of major developed economies like the US, Germany, the UK and Japan. The positive numbers are driven by high investment and robust private consumption which have been supported by wage growth and a tight labor market. Despite sanctions imposed on Russia by Western nations, the country has managed to sustain its key energy exports and maintain its economic partnership with China. Trade volume between Russia and China reached a record high of $240 billion last year further solidifying their economic relationship.
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 maintain its position as one of the fastest-growing economies in the world. Despite this resilience, expectations for 2025 are more moderate as Russia faces challenges such as low oil prices and political instability in key regions like Chechnya and Dagestan. Overall, Russia’s economy continues to be an important player on the global stage, with significant investments in infrastructure projects such as roads, ports and airports which will drive growth for years to come