International Monetary Fund predicts Russian economy to grow 2.6% in 2024

According to calculations published by the IMF on January 30, Russia's GDP will increase by 2.6% in 2024, instead of the previously expected 1.1%. At the same time, in 2025, this figure will increase by 1.1%, instead of the previously predicted 1%.

In addition, IMF analysts have once again revised their assessment of the Russian economy in 2023 in a positive direction. Amid the continued sanctions pressure, Russia's GDP has returned to growth, increasing by 3%. This is explained by large military spending and increased domestic consumption, amid rising wages and high demand for labor.

“The overall picture is certainly that the Russian economy is growing better than we expected,” said Piere-Olivier Gurinchi, chief economist and director of the IMF’s research department.

As Russia began its special military operation, Western countries began to announce unprecedented economic sanctions against Russia. According to the specialized database Castellum.AI, there are now nearly 18,800 different restrictive measures in force against Russia. This is more than Iran, Syria, North Korea, Belarus, Venezuela, Myanmar and Cuba combined.

The restrictions affected Russian sectors such as energy, finance, banking, aviation and trade. In addition, nearly half of Russia's gold and foreign exchange reserves, worth $300 billion, were frozen. And many international companies announced they were leaving Russia.

Faced with such great external pressure, IMF experts initially predicted that the Russian economy would shrink by 8.5% in 2022, with some analysts predicting a collapse of 10-25%. In mid-2022, IMF economists predicted that Russia's GDP would continue to decline by 3.5% in 2023. However, these expectations did not come true.

According to Russian officials, the final growth rate of gross domestic product in 2023 could be higher than the 3% forecast by the IMF. Russian Economic Development Minister Maxim Reshetnikov said that the growth rate could be around 4%.

In the report, the IMF also improved its forecast for global economic growth in 2024, from 2.9% to 3.1%, but kept its estimate for 2025 unchanged at 3.2%. At the same time, global GDP growth in 2023 was also higher than expected, reaching 3.1%, instead of 3% as previously predicted.

The IMF said economic growth momentum in Europe has been weaker than expected. Eurozone gross domestic product grew by just 0.5% at the end of last year, instead of 0.7%. The region's largest economy, Germany, entered recession and shrank by 0.3%.

According to the IMF, the decline in European indices is largely due to the consequences of the West's tough sanctions policy against Russia./.