The International Monetary Fund recently forecast that GDP (gross domestic product) would rise by 2.6% in Russia this year, a steep increase from its October estimate. That’s on top of a growth rate of more than 3% in 2023. Meanwhile oil revenues are surging again and unemployment is at a historic low. The Kremlin has ramped up defence expenditure to such a huge extent that 40% of all budget expenditure in 2024 will be on defence and security. That’s a war economy, and a dangerously overheated one at that. The first is that the Russian financial system was sufficiently prepared to weather the wave of banking and financial sanctions which hit in the first few weeks, having been in crisis response mode since the invasion of Crimea in 2014. What do you think that Russia is doing right ?
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