WASHINGTON: The growth in the Russian economy has “surprised” the International Monetary Fund (IMF) given the sanctions against Moscow in the wake of the war in Ukraine, reported dpa news.

“It’s a war economy,“ said IMF Communications Director Julie Kozack in Washington on Thursday. The Russian economy has a high proportion of military spending, which is fuelling production. “There’s also quite a lot of social transfers which are helping to raise consumption,“ she said.

However, there are currently also signs that the economy is “overheating” - such as a rise in inflation. Russia’s economic growth is expected to slow down in the medium term, said Kozack.

She cited the fact that the country is cut off from the international financial system and only has limited access to technology as reasons for this. “I would also note that in terms of human capital, Russia has lost some highly skilled labour from the labour force.”

All these factors will have a “significant impact on growth and prospects for the medium term”.

In January the IMF predicted growth of 2.6 per cent for Russia in 2024 - 1.5 percentage points higher than had been expected in autumn. According to the IMF, the reason for the upward revision is high military spending and private consumption supported by wage growth. -Bernama

Clickable Image
Clickable Image
Clickable Image