Russia has been having a relatively good economic outlook, despite the numerous sanctions placed on it, Reuters reports.
The Russian economy is highly dependent on natural resources, with oil, gas, and minerals being major exports. However, this heavy reliance poses challenges, making it vulnerable to fluctuations in commodity prices and global market dynamics. However, it has been able to forge close links with consuming powers such as India and China.
Domestically, Russia has been put on a “war economy” footing. The War in Ukraine is consuming an increasing potion of the GDP, but it has been able to grow its domestic production capabilities to an extent that Western nations are having a hard time matching.
Most importantly, the head of the Central Bank of Russia, Elvira Nabiullina, has skillfully managed the ruble and kept inflation under control. The Russian economy had a 5.7% inflation rate, well below Western ones, and modest growth at 1.2%. Government expenditures have grown, but it is unclear how much of a deficit Russia will have.
Finance Minister Anton Siluanov has repeatedly said Russia’s budget deficit this year would be no more than 2% of GDP, although most analysts disagree.
While Russia’s economy is facing challenges, this is part of a broader trend impacting many nations around the globe. Sanctions levied against Russia since 2014, and even more so since 2022, might not be having the intended effect.
