Russia’s GDP is expected to grow 3.9% this year, higher than last year and surpassing many major Western economies.
On Russia-24 TV channel on August 30, Russian Finance Minister Anton Siluanov commented that the economy is growing faster than officials expected. In the first half of the year, Russia’s GDP increased by 4.7%. He said this is a “very good number”.
“We see investment growing by about 8%. Real disposable incomes are also growing. The dynamics of the economy this year are better than we initially forecast. Last year, GDP grew by 3.6%, which was already high. This year it will exceed that,” Siluanov said. He forecasts Russia’s growth this year at 3.9%.
Budget revenues are also 4.7 trillion rubles ($52 billion) higher than the same period last year. The increase is due to oil and gas sales and domestic economic activity.
Customers shop at a market in St. Petersburg (Russia) in November 2023. Photo: Reuters
The budget deficit is also forecast to be around 1.1% of GDP by the end of this year. Russia will also have an additional $30 billion in the budget next year, thanks to changes in tax policy. The surplus will be used for priority tasks, Mr. Siluanov said.
In its April forecast, the Russian Ministry of Economic Development expected the country to grow by 2.8% this year. That figure is expected to be revised in early September.
The World Bank (WB) recently raised its forecast for Russia’s economic growth, with 2.9% this year and 1.4% in 2025. The previous levels were 2.2% and 1.1%, respectively.
The International Monetary Fund (IMF) in April forecast that Russia’s GDP would grow by 3.2% this year, higher than major economies such as the US, UK, France and Germany. The IMF said that “stable” oil exports and “remaining high” public spending had driven up Russia’s growth. Domestic consumption and investment were also buoyant.
The forecasts run counter to the West’s goal of hammering Russia’s economy after the war in Ukraine. Russia says Western sanctions on key sectors of its economy have only made it more self-reliant. Exports of commodities and crude oil to countries like India and China, amid high oil prices, have also helped the government maintain a steady source of revenue.