The Russian economy is projected to decline in its share of global GDP over President Vladimir Putin’s fifth presidential term, reaching its lowest level since the end of the Soviet Union. Despite facing Western-led sanctions following Russia’s invasion of Ukraine in 2022, the IMF upgraded its forecast for Russia’s economic growth in 2024 to 3.2 percent, higher than previously predicted. However, new IMF data indicates that while Russia’s economy is expected to grow, its share of global GDP is set to decrease gradually between 2024 and 2029.
According to IMF figures, Russia’s share of global GDP is expected to decrease from 2.947 percent in 2023 to 2.706 percent in 2029, the year before Putin’s presidential term expires. This decline would be a significant drop from the previous low of 2.83 percent recorded in 1998 when Russia defaulted on its debt under President Boris Yeltsin. The country’s economy is expected to face turbulence and rebound strongly in 2023, with a GDP growth of 3.6 percent driven by factors such as military spending, trade with China, stable oil exports, corporate investment, and private consumption.
However, despite the predicted robust growth in 2024, with increased defense spending and other factors driving the economy, Russia’s GDP growth is expected to slow down to 1.8 percent in 2025. This decline is partly due to a labor shortage in certain sectors, exacerbated by the mobilization of soldiers and men of fighting age avoiding the draft. In 2023, Russia’s Central Bank raised interest rates to 16 percent in an attempt to curb inflation, which remains high at 7.8 percent.
The IMF’s forecasts raise questions about the effectiveness of the sanctions imposed on Russia, which aimed to isolate Moscow from the global financial system and cut funding for the war in Ukraine. Despite these challenges, the Russian economy has shown resilience and is expected to continue growing in the coming years. However, Russia’s share of global GDP is projected to decrease over the next decade, indicating a shift in its economic standing on the global stage. Newsweek has reached out to the Russian Financial Ministry for comment on these projections.
