Russia’s economy which has been adjusted to a War footing has seen its GDP grow by 4.4% in the first seven months of this year despite a package of western sanctions.
The International Monetary Fund (IMF) had projected that Russia’s GDP would grow by 3.2% and would collapse to 1.8 percent next year.
Russia’s Prime Minister Mikhail Mishustin told a government meeting on Tuesday that the country’s economic performance in this years first seven months was more than two times higher than last year.
“According to preliminary estimate by the Economic Development Ministry, GDP grew by 4.4% in seven months of this year, which is more than two times higher than last year’s level,” he said.
Positive dynamics was reached due to branches of the real sector, Mishustin noted.
“Branches of the real sector were the main drivers. This is first of all manufacturing where output grew by 8.6% in seven months,” he said.
“Growth of capital investment closely approached 11% in the first half of the year,” the prime minister said, adding that “the unemployment level has drooped to all-time lows equaling 2.4% this June.”
The total growth of the Russian economy in 2024-2027 may reach 13%, Minister of Economic Development Maxim Reshetnikov said.
“Our economy is developing steadily despite external shocks. For the period 2020-2023, the GDP growth is 5.5%. This is higher than in many developed countries,” the minister pointed out. In 2024, he recalled, GDP growth is expected to be 3.9%.
“In total, for 2024-2027, GDP will grow by 13%,” Reshetnikov noted.
At the same time, consumer demand will continue to grow, accounting for about 60% of total GDP growth, the head of the Ministry of Economic Development added.
“The growth of consumer activity will be provided, first, by an increase in the real monetary income of the population. The main contribution will be made by the growth of wages against the background of maintaining a low level of unemployment,” Reshetnikov explained.
According to Finance Minister Anton Siluanov, Russia’s budget deficit will not exceed 1% of GDP within three years, Finance Minister Anton Siluanov. “The budget was formed based on ensuring a balanced structure and a zero primary balance, the budget deficit within three years will not exceed 1% of GDP,” the minister said.
At the end of 2023, Russia’s budget deficit will amount to 3.24 trillion rubles ($34.91 bln), or 1.9% of GDP. According to the government’s forecast in the draft budget, the federal budget deficit in 2024 will amount to 2.12 trillion rubles ($22.84 bln), or 1.1% of GDP.