![]() ![]() ![]() The International Monetary Fund expects Russia’s growth to remain flat this year, but for the economy to shrink by at least 7% in the medium term. The World Bank and the Organization for Economic Cooperation and Development are forecasting contractions of 3.3% and 5.6%, respectively, in 2023. The Russian government’s revenue plunged 35% in January compared with a year ago, while expenditures jumped 59%, leading to a budget deficit of about 1,761 billion rubles ($23.3 billion). Yet while China has thrown the Kremlin an economic lifeline by buying Russian energy and providing an alternative to the US dollar, cracks are starting to appear. Preliminary estimates from the Russian government show that economic output shrank by 2.1% last year - a contraction more limited than many economists initially predicted. Russia’s economy has showed surprising resilience to unprecedented sanctions imposed by the West, including an EU ban on most imports of oil products. ![]() He also stressed the importance of domestic demand to the economy, saying it was becoming the leading driver of growth. Putin said Russia’s economy had been growing since July, thanks in part to stronger ties with “countries of the East and South,” likely referring to China and some African countries. It is a rare admission by the Russian leader, who has repeatedly insisted that Russia’s economy remains resilient and that sanctions have hurt Western countries by driving up inflation and energy prices. “The illegitimate restrictions imposed on the Russian economy may indeed have a negative impact on it in the medium term,” Putin said in televised remarks Wednesday reported by state news agency TASS. President Vladimir Putin has conceded that Western sanctions designed to starve the Kremlin of funds for its invasion of Ukraine could deal a blow to Russia’s economy. Russian President Vladimir Putin talks at the Grand Kremlin Palace, on March 21, in Moscow, Russia. ![]()
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