The Russian economy’s share of global gross domestic product (GDP) will decline during President Vladimir Putin’s fifth term, reaching its lowest level since the collapse of the Soviet Union, according to the latest figures from the International Monetary Fund. It is expected.
Russia’s economy has shown resilience in the face of Western-led sanctions imposed after President Putin launched a full-scale invasion of Ukraine in February 2022. The sanctions sought to isolate Russia from the global financial system and reduce war funding.
In April, the IMF revised upward its forecast for Russia’s economic growth in 2024 to 3.2%, almost triple the 1.1% growth forecast in October 2023. The updated numbers are higher than GDP growth forecasts for the United States and many other Western countries. Countries raised questions about the effectiveness of sanctions.
But other IMF data shows that while Russia’s economy is expected to grow, it may not grow as fast as other countries.
New statistics from the IMF predict that Russia’s share of global GDP will shrink between now and 2029. The country’s GDP share is expected to increase slightly from 2.947 percent in 2023 to 2.948 percent in 2024. However, from then until the end of the decade Russia’s share of the world economic growth rate will gradually decline.
According to IMF data, in 2025 Russia’s share of global GDP will begin to shrink, falling to 2.908%. The GDP share in 2026 is expected to be 2.855%, and in the following two years it will be 2.803% and 2.754%. By 2029, the year before Putin’s term as president ends, Russia’s share of the world’s gross domestic product (GDP) is expected to fall to 2.706%.
The projected figure is lower than the all-time low of 2.83% set in 1998, when Russia under President Boris Yeltsin defaulted on its debt and triggered a financial crisis. newsweek asked the Russian Ministry of Finance for comment via email.
Although the country’s economy faced turmoil, it rebounded more strongly than expected in 2023, with GDP growth of 3.6%, according to Russian government statistics agency Rosstat.
This growth is expected to continue this year, driven by significant increases in military spending and trade with China, stable oil exports, and increased business investment and consumer spending.
Although strong growth is expected this year, thanks in part to the Kremlin’s allocation of 10.8 trillion rubles ($115 billion) for defense spending, Russia’s GDP growth rate is expected to rise from 3.2% in 2024, according to the IMF. It is expected to sharply decline to 1.8% in 2025.
Russia also faces critical labor shortages in parts of its economy, made worse by the mobilization of hundreds of thousands of soldiers and an exodus of combat-age men seeking to avoid conscription.
In 2023, the Central Bank of Russia raised interest rates to 16% to curb inflation, but the inflation rate remains high at 7.8%.
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