Russian officials predict the economy will drop by less than earlier forecasts

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The Russian economy has been battered by sanctions that have been imposed since the invasion of Ukraine earlier this year. The Russian economy is estimated to drop by less than previously forecasted, with a return to growth expected to happen in 2024.

Russian economy will shrink by less than previous forecasts

The economic estimates were made by the economic development minister, Maxim Reshetnikov, who said the Russian economy would be back on track in 2024 following a rise in domestic demand and investment.

The executive also predicted that the Russian gross domestic product would shrink by 2.9%, a notable low compared to the earlier estimate of negative four percent. Reshetnikov announced this while speaking to the upper chamber of parliament.

The International Monetary Fund has also estimated that the Russian economy will contract by 6% in 2021. The Russian economy has suffered adverse effects following the sanctions that the West imposed. With these sanctions, Russia overtook North Korea to become the most sanctioned country in the world.

Reshetnikov has also predicted that the Russian GDP will drop by 0.8% over the next year because of a slump in exports. However, the GDP will also increase by 2.6% in 2024 due to “an increase in domestic demand, the level of consumption and investments.”

The minister also said Russia would redirect oil and gas exports to neutral countries. This will help support the country’s economic activities and their growth by 2024-2025.

The announcement by the economy minister also follows an order by the Russian President, Vladimir Putin, to have a partial military mobilization in the country. This is in an attempt to escalate the Moscow military offensive in Ukraine that could further affect the economy.

Russia’s deputy PM also anticipates a slight drop in the economy

The First Deputy Prime Minister of Russia, Andrei Belousov, believes the Russian economy will drop below 3% in 2022. While speaking at a conference in late August, the government official said that a robust labor market would cushion the economy from the economic effects of the ongoing “special military operation” in Ukraine.

At the time, the deputy PM said Russia’s GDP would drop by slightly more than 2 percent in 2022. He also said that in 2023, the economy would not drop by more than one percent.

Some economists have predicted a 15% decline in the GDP in 2022 amid the influx of Western sanctions that continue to pressure the Russian economy. While these sanctions were imposed to cripple the Russian economy, the ruble remained a top-performing currency in 2022.

About Ali Raza PRO INVESTOR

Ali is a professional journalist with experience in Web3 journalism and marketing. Ali holds a Master's degree in Finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of leading cryptocurrency publications including Capital.com, CryptoSlate, Securities.io, Invezz.com, Business2Community, BeinCrypto, and more.