Russia’s Economy Grew by 3, 6% Despite 16 000 Sanctions Imposed to it’s Goods and Services

Picture courtesy: (Medium) Russia grows it’s economy defying sanctions and rendering them ineffective.

(The Post News)- The Russian economy has grown by 3.6% in 2023 after contracting by 1.2% in 2022, and it is predicted to grow by another 3.2% in 2024 by the International Monetary Fund, higher than all advanced economies, despite being heavily sanctioned.

Currently, 16,000 sanctions have been imposed on Russia as a consequence of its invasion of Ukraine in February 2022.

The sanctions were meant to curb economic activity in Russia, so it lost its ability to fund its war against Ukraine.

The world’s most advanced economies are forecast to reach GDP growth rates below those of Russia in 2024.

The United States of America will have the highest growth rate of 2.7% among the advanced economies, while the United Kingdom will grow by 0.5%, Germany by 0.2%, and France by 0.7%.

The 3.2% forecasted economic growth for Russia is a slight decrease of 0.4% compared to the nation’s growth rate of 3.6% in 2023.

According to Huilang Tan, a senior business news reporter at Business Insider, Russia’s economy has been driven by the war and essentially five factors, such as Russia waging the war outside of its borders, resulting in little damage to Russian infrastructure compared to Ukraine.

Secondly, by generating demand for wartime goods and services, wars need resources, which include food supplies, weapon supplies, medical supplies, and other types of supplies.
Thirdly, Russia is self-reliant in the production of weapons and commodities.

Russia is a producer of highly important commodities such as oil, natural gas, metals, and wheat. Having access to these means, they never had to depend on supply from other nations, which could have been severed by sanctions.

Fourthly, through driving and sustaining its economy with subsidies and policies.Lastly, by ensuring that foreign debt is kept low and exports are kept high.

Recently, on Monday, the World Bank classified Russia as a high-income nation. The last time Russia was classified as a high-income country was in 2014, when it invaded Crimea, according to the first post.

“Economic activity in Russia was influenced by a large increase in military-related activity in 2023, while growth was also boosted by a rebound in trade (+6.8%), the financial sector (+8.7%), and construction (+6.6%.” According to the World Bank’s report,. “These factors led to increases in both real (3.6%) and nominal (10.9%) GPD, and Russia’s Atlas GNI per capita grew by 11.2%,” stated the report.
This means that some Russians earn more than they did before and are therefore better off financially.

The latest economic reports on Russia’s economy continue to illustrate how the Russian economy is defying sanctions and rendering them ineffective for what they were designed to achieve.