“Today, the GDP is already higher than before the attack in the form of Western sanctions,” said Russian President Vladimir Putin, quoted by Reuters. “We expect GDP to increase by at least 3.5 percent this year,” added the president.
According to him, the West has rested on its laurels and is technologically lagging behind. According to Putin, Russia is ready to cooperate more with China.
The Russian economy is export-oriented. Gross domestic product (GDP) fell 2.1 percent last year as the country coped with the effects of sanctions. Western countries introduced them in an attempt to isolate Russia after its troops invaded Ukraine and to make it more difficult for it to sell raw materials. The money from the sale helps Moscow finance the war campaign.
“Today, the GDP is already higher than before the attack in the form of Western sanctions,” Putin was quoted as saying by Reuters. “We expect GDP to increase by at least 3.5 percent this year,” added the president.
According to him, the Russian economy has proven to be more resilient than both Moscow and its opponents thought. The economy is benefiting from a noticeable increase in arms spending in connection with the war in Ukraine.
However, high interest rates have adverse effects on the Russian economy. Analysts expect the Russian central bank to raise the key interest rate to 16 percent next week. The bank has an inflation target of four percent, but the inflation rate is significantly higher due to high domestic demand and is expected to be above seven percent by the end of the year. In Russia, there is a lack of labor, the unemployment rate has thus decreased to 2.9 percent, which is the minimum for the measurement period.
Putin, as on several other occasions, highlighted the health of the Russian economy and state finances. On the contrary, according to him, Western sanctions have shown that they have virtually no significant effect on the Russian economy. He mentioned, for example, that the state budget deficit fell again in November and in the first 11 months of this year it decreased to 878 billion rubles (roughly 214 billion CZK), which is about 0.5 percent of GDP. A month earlier, the deficit was 1.24 trillion rubles.
“It is obvious that the Western financial system is becoming technologically obsolete,” Putin said. “It rests on its laurels for so long, it gets used to monopolies and exclusivity, to the lack of real alternatives, to the habit of not changing anything, that it becomes archaic,” he added. According to Putin, the monopoly of large Western banks will disappear in the coming years due to the technological revolution.
Putin also said that Russia is ready to cooperate with China in any field, including military technology.