Russia’s Resilient Economy: How it Defied Sanctions and Outpaced Major Advanced Economies in 2024

In 2024, Russia’s economy is expected to grow by 3.2%, surpassing growth rates predicted for major advanced economies such as the US. Despite being in a state of war and facing economic sanctions, high levels of investment and strong private consumption have propelled Russia’s economy forward. This forecast has surprised many in Western countries who had hoped that imposing sanctions on Russia would severely hinder its economy and put pressure on Putin’s government.

Russia’s energy sector has remained resilient, with sustained exports of oil and commodities to major markets such as India and China. By avoiding the oil price cap set by G-7 countries, Russia has been able to continue exporting energy at strong levels. The country’s steadfastness against Western sanctions can be attributed in large part to its strong partnership with China. Trade between the two countries hit a record high of $240 billion last year, driven by China’s demand for essential Russian commodities that have been discounted due to the West’s reluctance to engage in trade with Russia.

Despite this momentum, the International Monetary Fund (IMF) anticipates that it will slow down in 2025, with Russia’s growth rate dropping to 1.8%. The government in Moscow has been seizing funds from fleeing foreign companies due to the war in Ukraine, with reports indicating they have taken $387 million as of mid-March. This trend is likely to continue as more companies pull out of Russia due to the ongoing conflict.

Overall, Putin can celebrate his country’s economic growth while also acknowledging the challenges ahead due to geopolitical tensions and trade restrictions imposed by Western countries.