Russia is doing better than expected despite the sanctions after the attack on Ukraine. Contrary to previous assumptions, the International Monetary Fund expects growth this year. It is likely to be even higher than in some European countries.
The Russian economy is doing better than experts initially expected. The International Monetary Fund (IMF) significantly increased its growth expectations for 2023 and 2024. The Russian central bank warned that inflation risks could increase further. After the economy shrank by 2.2 percent last year, the IMF is now forecasting growth rates of 0.3 percent this year and 2.1 percent next year. The estimate for 2023 was raised by a whopping 2.6 points and by 0.6 points for 2024.
Russia is likely to do better this year than Germany or the UK, for example. For the continent’s largest economy, the IMF predicts growth of just 0.1 percent. According to the forecast, the British economy will even drop significantly by 0.6 percent.
Originally, there were some forecasts that the Russian economy could collapse by at least ten percent in 2022. According to the central bank in Moscow, the economy quickly adapted to the new situation. Russia attacked Ukraine at the end of February 2022, which is why extensive sanctions were imposed on Russia. As a result of the war, energy and food prices have risen massively.
Most experts assume that the Russian central bank will keep its key interest rate stable at 7.5 percent next week. Although inflation rates are slowly declining, they are still well above the target of four percent. In January, household inflation expectations were 11.6 percent. According to central bankers, the risks of even higher inflation are increasing. The weaker ruble, which fell in December as a result of the price cap on Russian oil, could also contribute to this.
