- Russia's economy is predicted to grow by 3.2% in 2024, outpacing all advanced economies, including the US, the IMF said.
- Despite the war, high investment and robust private consumption have driven Russia's economy forward.
Russia's economy is expected to grow significantly faster than major developed economies this year, including the US, according to the International Monetary Fund.
The country's war-time economy is forecast to grow by 3.2% in 2024, largely outpacing expected growth for other advanced economies including the US (2.7%), Germany (0.2%), the UK (0.5%), and Japan (0.9%), IMF said in a report published on Tuesday.
The surging growth rate has been linked to the effects of "high investment" and "robust private consumption" buoyed by wage growth in a tight labor market, though the IMF said it expects these effects to taper off in 2025, with a growth rate of 1.8%.
The forecast is a wake-up call for Western countries that have hoped to throttle Russia's economy with sanctions to make its war in Ukraine unsustainable. Growth at that level would back up Vladimir Putin's claims that Russia's economy has withstood the most dire effects of Western sanctions and trade restrictions.
Meanwhile, as foreign companies leave Russia amid the war, Moscow has been accruing funds from fleeing firms, seizing $387 million as of mid-March.
In its energy trade, sustained oil and commodity exports to major markets like India and China, alongside Russia's sidestepping of G-7 countries' oil price cap, have enabled it to maintain strong energy exports.
Russia's resilience against Western sanctions stems largely from its boundless alliance with China. Trade volume between the two countries surged to a record $240 billion last year, fueled in part by Beijing's appetite for essential Russian commodities that have been discounted amid the West's reluctance to trade with Moscow.