In February, Russian Prime Minister Mikhail Mishustin had a televised 1:1 meeting with President Vladimir Putin. In it, he told his boss that the Russian economy had “successfully dealt with the unprecedented pressures related to the sanctions, in contrast to many of the countries that actually imposed them”.
Putin’s stilted, formal, televised meeting with senior government officials is par for the course in Russia, the contents having first been vetted by the Kremlin before broadcast, lest the populace hear bad news. From Mishustin, the news was mainly good.
Mishustin said Russia’s gross domestic product (GDP) had grown by 4.1% in 2024, or 0.2% above expectations, and that Rosstat, the Federal State Statistical Service, had now revised its economic data for 2023. “Our GDP growth in 2023 was not 3.6% as originally reported, but in fact 4.1%,” he said, explaining that the correction was prompted partly by the subsequent publication of companies’ annual reports.
The Trump effect
Russia’s economic growth has been stimulated by state spending on defence, given its problems in Ukraine. Late last year, it even appeared close to overheating, but Donald Trump’s return to the White House—and his efforts to re-engage Russia—have been a cause for optimism in Moscow.
Trump speaks to Putin regularly, his administration avoids blaming Russia for the war in Ukraine, together with US Vice-President JD Vance he gave Ukrainian President Volodymyr Zelenskyy a public dressing down in Washington, and his team talks of ending sanctions against Russia for its invasion. It is therefore little wonder that the Russian stock market is up 11.1% since January, when Trump took office.
Although the Russian ruble dropped briefly to 113 US dollars in the new year, it has since recovered to around 85 dollars at the time of writing. Unemployment in Russia was only 2.5% for most of 2024, according to official Rosstat figures, dropping to 2.3% in March 2025, as Mishustin said incomes had increased by 8.4% and real wages by 8.7% last year.
How Europe reacts
Despite Europe’s divestment from Russian energy, it is far from weaned. The annual State of the EU Energy Union report showed that Russia is still Europe’s second-largest supplier of liquid natural gas, covering 18% of the continent’s needs.
The Centre for Research on Energy and Clean Air (CREA) published data recently suggesting that the European Union bought more than $205bn of Russian fossil fuels since the full-scale invasion was launched in February 2022. This may have been behind Trump’s comments to the US Congress that “Europe has sadly spent more money buying Russian oil and gas than they have spent on defending Ukraine, by far”.
