Against Sanctions: The Vienna Institute for International Economic Studies Revises Russia’s Growth Forecast for 2024 and 2025

The Vienna Institute for International Economic Studies (wiiw) has revised its growth forecast for the Russian economy upwards, despite being subject to Western sanctions. Despite these challenges, the economy of Russia is growing more strongly this year compared to the Central and Eastern European EU countries and significantly more robustly than the almost stagnant Eurozone. However, the outlook for Ukraine has become more uncertain.

For 2024, wiiw predicts an average growth of 2.6 percent for the EU members in Central, Eastern, and Southeastern Europe, which is expected to increase to 3 percent in 2025. These countries are projected to outperform the Eurozone, which has shown minimal growth this year, and are expected to grow almost twice as fast as the Eurozone next year. The main drivers of growth are the sharp increase in real wages, stimulating private consumption, although a significant portion of additional disposable income is being saved.

The industry of the EU members in the region is experiencing a recession, primarily due to the deep crisis in German industry. The Visegrád states, including Poland, the Czech Republic, Slovakia, and Hungary, along with Slovenia