Putin Faces Economic Challenges Ahead of Re-Election Despite Economic Recovery

Labour shortages, high inflation, and interest rates pose significant hurdles, even as GDP is set to grow 3.5% this year.

Russian President Vladimir Putin is facing economic challenges ahead of his re-election bid in March, despite the country's success in evading a Western oil price cap and driving a recovery in economic growth.
Labour shortages, particularly in high-skilled areas like IT, are a major concern, with unemployment at a record low of 2.9% and sectors like military production taking up a significant portion of the workforce.
Despite these challenges, Putin has announced that Russia's GDP is set to grow 3.5% this year, up from a 2.1% contraction in 2022.
Inflation remains a sensitive issue, with the central bank expected to hike interest rates to 16% on December 15 in an attempt to control price rises.
Russia's economy has dealt with sanctions better than expected, with higher military spending and recovering oil revenues helping to bolster the economy.