Despite ongoing war, the International Monetary Fund predicts that Russia’s economy will grow by 3.2% in 2024, outpacing major developed economies like the US. This growth is driven by high investment and strong private consumption, supported by wage growth and a tight labor market. However, the IMF forecasts a slowdown in growth to 1.8% in 2025.
Russia’s significant economic growth is faster than expected for major developed economies, placing it ahead of countries like the US, Germany, the UK, and Japan. While expectations for 2025 are more moderate, Russia’s resilience in the face of sanctions so far suggests some optimism about its future economic prospects.
The outlook for Russia’s economy presents a challenge to Western nations that have implemented sanctions to curb Russia’s actions in Ukraine. Vladimir Putin has touted the strength of Russia’s economy despite facing sanctions, and the country has managed to sustain its key energy exports. Additionally, Russia’s close partnership with China has continued to strengthen trade between the two countries, providing Russia with a lifeline amid Western sanctions. Trade volume between Russia and China reached a record high of $240 billion last year, further solidifying their economic relationship.