Russia has survived the shock of Western sanctions, that's obvious. However, it is and continues, very surprising. Russia's latest economical performance is amazingly good. It develops at a rate that rich Western competitors can envy.
In the first year of the war, Russia's economy shrunk, though only by 1.2%. This curling was incomparably smaller than the then authoritative predictions. The planet Bank spoke of 11 percent and the Russian Bank spoke of a 10% decrease in GDP. I described this amazing resilience in the text “Why didn’t Russia’s economy fail? (Lucky Man: Why didn't Russia's economy fall? | Think Poland (myślpolska.info))
Despite the black forecasts (also for the erstwhile year the OECD predicted a drop of 2.5%), Russian economics began to grow in 2023, and this at a fast pace of 3.6 percent. It's different with specified a strong impact, a immense amount of sanctions and a cut off from the richest markets. 70% of the world's GDP, which shut down access to its products (in losses) and cut off imports (in even more painful losses), further penalised Russia with various sanctions... And here the attacked develops much faster than the attacker! Amazing.
This year the Russian economy is increasing even faster – by 5.4% in the first 4th of 2024, erstwhile Germany rolls by 0.9% and the US only increased by 1.3% (Poland by 2.8%). Ironically, the IMF, a key global financial institution, predicts that this year the Russian economy will increase its GDP by 3.2%. But more importantly, this is expected to be a higher growth rate than projected for developed Western economies, including American economies. These are to make at a rate of 1.5%.
Not only GDP, but besides another economical indicators of Russia look great. The trading balance for 5 months ’24 was, as always, positive, at US$56 billion, and 18% higher than the year before. besides the current account of the Russian economy for the first 4 months was affirmative and amounted to $31.7 billion (when it was twice as low last year).
Russia has had a massive surplus of trade income with the planet for years. They are immense in relation to the size of its economy, which is not able to completely manage them. Over the decade before 2022, this was an average of 4.4% of GDP, and in 2022 (at staggering prices of natural materials) it reached a colossal share of 11% of GDP. In 2023, the rate was importantly lower, but the economy inactive recorded an export surplus of 2.5% of GDP.
The consequence of economical improvement is the simplification of unemployment, even the deficiency of hands to work. Thus, wages have increased significantly, which increase much faster than inflation. And this besides reduced its nuisance – in ’23 it fell to 7.4% compared to 12 percent the year before. poorness has besides been reduced. The standard of surviving of Russians, who present do not feel the burden of war, on the contrary, is improving, despite difficulties and shortcomings, inevitable with specified a immense economical maneuver.
Consumer sentiments are good adequate that public spending increases, it does not save in anticipation of worse times, which in addition could drive the economy down. There has besides been the integration of society around the elites of power. The results of the March presidential election show this clearly. president Putin's office obtained 88.5% of the votes at the highest historically turnout, compared to 77.5% in the erstwhile 2018 election or 64% in 2012. War does not do social harm, it did not quarrel with the elite, due to the fact that the military fights volunteer and contract, death of relatives does not look into the homes of the average Russian family.
So much for the beginning of the key parameters of this economical phenomenon, which has survived the attack and is developing faster than those who issued its economical war. Of course, not everything is so pink, there are many difficulties and threats, but Russia has powerful unused resources that it launches. About this in the next article...
Andrzej Szczęsniak
Think Poland, No. 27-28 (30.05-7.07.2024)
