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Peter Davis

An writer at FOMOdrive

  • Nov 16, 2023
  • 2 min read

Russia's GDP grew at a record level in almost two years

Rosstat has recorded the highest quarterly GDP growth since the end of 2021.

Growth was driven by the manufacturing, construction, and agricultural sectors.

The European Commission has significantly upgraded its prediction for Russian GDP growth in 2023, reducing the EU GDP growth forecast from 1% to 0.6%.

Preliminary data released by Rosstat on Wednesday evening indicated that Russia's GDP increased by 5.5% in the third quarter of 2021 compared to the same period in 2022.

The fourth quarter of 2021 saw the highest quarterly GDP growth since the end of 2021, with a growth of 5.8%.

Interfax reports that the Rosstat data exceeded the expectations of economists (+ 5.2%), the calculations of the Ministry of Economic Development (also a 5.2% increase) and the estimates of the Central Bank (a 5.1% increase).

Polina Kryuchkova, Deputy Minister of Economic Development of the Russian Federation, has declared that the recovery stage of the Russian economy has been concluded and active growth is now being observed. Manufacturing, construction, and agriculture remain key drivers of the economy.

The economy is further bolstered by an expansion in consumer spending and a rise in the real wages of the populace.

The European Commission (EC) has revised its forecast for Russia's GDP, predicting growth of 2% in 2023. This is an improvement from the May forecast of a 0.9% decline in 2023 and an increase of 1.3% in 2024. The EC now expects the Russian economy to grow by 1.6% annually in 2024 and 2025.

The forecast predicts that Russia will be able to shift the majority of its exports, particularly raw materials, to China, India, and other nations. However, due to voluntary oil production reductions and "challenges in replacing lost European gas markets," the export recovery in the second half of 2023 will be limited.

Maxim Reshetnikov, the head of the Ministry of Economic Development of the Russian Federation, stated last week that the Russian GDP will grow by 3% in 2023, which is higher than the official forecast of 2.8% from September.

The Ministry of Economic Development anticipates that the Russian Federation's GDP will increase by 2.3% in 2024, while the Central Bank predicts a growth of only 0.5-1.5%. Analysts' consensus forecast from the beginning of November suggests a growth of 1.3% in 2024.

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