The International Monetary Fund on Tuesday boosted its 2024 growth forecast for Russia, with surging government spending on the war continuing to provide a powerful economic stimulus for the country.
The IMF also slashed its outlook for Ukraine, whose economy and infrastructure have been battered by two and a half years of conflict. Both Russia and Ukraine are spending huge sums to continue fighting in the war, with Moscow's state expenditures having helped the economy grow strongly despite a barrage of Western sanctions.
According to its latest forecast, the IMF said it expects the Russian economy to expand by 3.6% in 2024, up from a previous forecast of 3.2%. But it also cut its prediction for next year's growth from 1.5% to 1.3% amid signs of mounting economic problems.
Russia's Central Bank has repeatedly warned of the dangers of the government's military spending, saying the economy has been “overheating” for months. High inflation — 8.6% in September — and intense labor shortages are also posing economic headaches for Moscow.
In a rare move, President Vladimir Putin acknowledged earlier this month that Russia's record low unemployment of 2.4% was a “limiting factor” for the country's growth prospects.
Russia's Central Bank has raised interest rates to 19% in a bid to bring inflation under control, and it could increase them again at a meeting this coming Friday.
Russia's Finance Ministry, meanwhile, proposed raising military spending next year by almost 30% to around $145 billion, with combined defense and security spending set to account for approximately 40% of state expenditures.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
