“Despite the—let’s be honest—pessimistic prognoses that were made and that continue to be made by some experts today, mostly Western experts, of course, Russia is now one of the top five economies of the world.”
So said Russian President Vladimir Putin at a meeting of the Council on Strategic Development and National Projects in August 2023. He has a point.
JP Morgan Chase, a prominent Western bank, recently revised its GDP predictions from -1% to +3.3%. Commentators who trumpeted a Russian economic collapse have gone into hiding.
At the same meeting, Putin claimed that the size of Russia’s economy had overtaken Germany’s in terms of gross domestic product based on purchasing power parity (GDP PPP).
Has it? Nearly two years after its full-scale invasion of Ukraine, the Kremlin says the Russian economy is stronger than ever. Is it? Al Majalla digs into the data to find the answers.
Scratch of sanctions
The Western sanctions on Russia were designed to weaken Putin’s ability to fund his war in Ukraine. Initially, they may have had an impact.
According to the World Bank and the US Department of the Treasury, Russia’s economy contracted by more than 2.1% in 2022. Foreign investors withdrew around $250bn. The rouble fell by 25% against the dollar, making imports more expensive.