Russia’s Economy Once Again Defies the Doomsayers

March 10, 2024
The Economist

This is a summary of an article originally published by The Economist.

The Economist writes: 

  • Last year prices accelerated rapidly; economists believed they could spiral out of control. ... Once again, however, the Russian economy appears to be proving the pessimists wrong. Data to be published on March 13 are expected to show that prices rose by 0.6% month-on-month in February, down from 1.1% at the end of last year. On a year-on-year basis inflation is probably no longer rising, having hit 7.5% in November. 
  • The result of Russia’s presidential election, which begins on March 15th, is a foregone conclusion. If it was competitive, these figures would do Mr. Putin no harm.
  • Central-bank officials ... believe that their policy—of more than doubling interest rates since July 2023—should take the credit for the inflation slowdown, and they are probably right. Russia ... seems to be heading for a “soft landing,” in which inflation slows without crushing the economy. ... Consensus forecasts for GDP growth this year of 1.7% look too pessimistic.
  • Russia’s economic resilience is in part the consequence of past stimulus. 
  • Sanctions-busting has also juiced the economy. ... Well over half of goods imports come from China, twice the share from before the invasion ... The discount on oil Russia offers to Chinese customers, for instance, has fallen from more than 10% in early 2022 to about 5% today. 

Read the full article at The Economist.

Photo by Nebojsa Ljuboja available in the public domain.