Russia’s economy is now forecast to grow faster than those of Germany and the UK in 2023. How is that possible?
The numbers would have been hard to imagine in the early days of the war, when Western sanctions sent Russia’s stock market and local currency, the ruble, into free fall and hundreds of international companies – from McDonald’s to Boeing – withdrew from the country. In March 2022, US Treasury Secretary Janet Yellen confidently predicted that “the Russian economy will be devastated”.
The Russians also expected a deeper economic crisis. According to reports, the Russian Ministry of Finance expects GDP to fall by more than 10 percent. As recently as December, a Reuters poll of 15 economists predicted a 2.5 percent decline for the coming year.
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And yet here we are, in early 2023, and the IMF is now forecasting that Russia’s economy, after contracting 2.2 percent last year, will grow again in 2023, by 0.3 percent and then by 2.1 percent in 2024 percent will grow for these European powerhouses? UK expected to shrink 0.6 percent; Germany will still be in the black, but only just; Growth of a feeble 0.1 percent is expected this year.