Posted on 04/25/2024 3:29:11 AM PDT by Mount Athos
Russia’s economy is expected to grow faster than all advanced economies this year, according to the International Monetary Fund.
Russia is expected to grow 3.2% in 2024, the IMF said in its latest World Economic Outlook published Tuesday, exceeding the forecast growth rates for the U.S. (2.7%), the U.K. (0.5%), Germany (0.2%) and France (0.7%).
The prediction will be galling for Western nations which have sought to economically isolate and punish Russia for its 2022 invasion of Ukraine.
Russia says Western sanctions on its critical industries have made it more self-sufficient and that private consumption and domestic investment remain resilient. Meanwhile, continuing oil and commodity exports to the likes of India and China, as well as alleged sanctions evasion and high oil prices, have allowed it to maintain robust oil export revenues.
Russia’s military-industrial complex has also expanded significantly during the war as defense spending and production have rocketed. In short, Russia has adapted to a “new normal” as its economy has been put on a war footing.
The IMF predicted that Russia’s economic growth would moderate in 2025, however, declining to 1.8% “as the effects of high investment and robust private consumption, supported by wage growth in a tight labor market, fade.”
The Washington-based IMF includes the U.S., U.K., the euro area’s largest economies, Canada and Japan as advanced economies. Russia, China and India remain in its “emerging and developing” Europe and Asia categories, respectively.
The head of the IMF told CNBC in February that the Russian economy was still facing significant headwinds despite the Fund’s rosy forecasts for the country of roughly 145 million people.
“What it [the growth data] tells us is that this is a war economy in which the state — which let’s remember, had a very sizeable buffer, built over many years of fiscal discipline — is investing in this war economy,” IMF Managing Director Kristalina Georgieva told CNBC’s Dan Murphy at the World Governments Summit in Dubai in February.
“If you look at Russia, today, production goes up, [for the] military, [and] consumption goes down. And that is pretty much what the Soviet Union used to look like. High level of production, low level of consumption.”
Georgieva said she believed the Russian economy also faced challenges related to an exodus of skilled workers and “because of the reduced access to technology that comes with ... sanctions.”
Bank of Russia Governor Elvira Nabiullina told lawmakers in Russia’s State Duma on April 8 that production in the country is being constrained by worker shortages, according to Reuters, although she noted that Russia’s economy was continuing to grow at an impressive rate.
Last week, Nabiullina also sounded a note of optimism over Russia’s inflation rate (at 7.7% in March), saying she believed the peak had passed, although it was too early to start cutting rates.
Russia’s central bank is expected to hold its key rate at 16% at its next rate-setting meeting on April 26, a Reuters poll showed last month. Analysts polled by Reuters expect rates to stand at 12.5% by the end of 2024, Reuters reported last week, far above the central bank’s inflation target of 4%.
Having begun his fifth term in office, Russian President Vladimir Putin has vowed to raise living standards in Russia, with increased spending on education, health care and public infrastructure. He also signaled that taxes on larger companies and wealthier individuals will rise.
One-seventh of the world’s landmass. You are not well versed in these matters.
The United States have become a wokester’s wetdream. Nothing in this once great nation works anymore.
How many years do you think it will take to turn around the current recession in the United States and clear the balance sheet from massive debt? Biden and Obama broke the piggy bank. They are going to steal the last penny for the globalists.
You will be lucky to have a job in 10 years at the current rate of US decline.
I have converted all my wealth into Bitcoin. The USD is going to be replaced by the American(s) Dollar soon enough. The US has been in essentially a recession since 2007, but let the White House tell you otherwise. The glass is 1/4 full here in the US, or 3/4’s empty.
Marktwain replies: Or, Russia becomes a satellite of China.
Yeah, we are winning for sure /s
One of the keys to America’s rise is that when things go wrong, one good election can get the country back on course. Meanwhile, Russia is in demographic decline and bleeding badly due to a foolish war.
From time to time, China and Russia make nice with each other, but it is against their nature and interest to do so in the long term.
You have faith in a system that is beyond a simple four-year election. Most of the funding and direction of the country is being “Trump Proofed” so he cannot change direction of where any money is going. You are sadly mistaken.
It is not a matter of faith. It is simply that I believe we can still do a reno job instead of a demo.
“Russian arms sales are way down cause the world sees they suck when going up against American military stuff.”
Is it a joke, yes? Do you believe that the world relies on CNN for information?
They generally see the opposite picture.
All of those “war spending” mantras are generally bullcrap. Russian defense spending has merely increased from $70b to $100b, which is miniscule in terms of the whole economy which largely grows on civilian import substitution.
Of course they get much more materiel, but it is based on reduction of waste in the industry.
For example, a laser guided 152-mm shell now costs about $15k, down from about $50k.
In Europe you see the opposite process. A regular 155-mm shell used to be $2k in 2022, and $8k in October 2023. Now they claim 50% increase from 2023 price.
Would you mind explaining me how a shell can cost even $2k, let alone $10k+?
Unions?
Do you think they didn’t exist in 2022?
Russia is on course to have an economy the size of Italys.
DEI?
Trans people?
Ever heard of PPP? It is currently ahead of Germany and set to surpass Japan in this year.
Inability to mass produce. Everything is outsourced to Asia.
Now, to meet the sudden surge of demand because of the Russian attack on Ukraine, the US and Europe are struggling to recreate production lines and their associated supply chains and work forces. As always, initial contracts have high per unit prices. In time, costs will go down as the new facilities amortize their fixed costs over longer production contracts.
To be sure, the new shells are also innately more expensive because they tend to have advanced fuses and guidance systems. When the green eye-shade guys run the numbers, they point out that new model guided shells are so accurate and effective that far fewer of them need to be fired. The result is a net savings, not just in fewer shells but in savings throughout the military logistics chain.
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