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last yr.

Russia's Economy Expands 3.6% in 2023, Fueled by Military Spending Amid Sanctions

Despite sanctions and global market isolation, Russia's economy shows growth, largely driven by increased military expenditures, raising questions about sustainability.

Russia’s economy grew last year thanks to a boost in military spending. Photo: EPA-EFE
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Overview

  • Russia's GDP grew by 3.6% in 2023, outpacing both the United States and Europe, despite facing extensive economic sanctions and being cut off from major global markets.
  • The growth is primarily attributed to a significant increase in military spending, as the Kremlin continues its military operations in Ukraine, with some economists questioning the long-term sustainability of this growth model.
  • Russian government forecasts a slower growth rate of 2.3% for 2024, below the International Monetary Fund's 2.6% prediction, indicating potential economic challenges ahead.
  • High inflation rates and a historically high government deficit, fueled by increased military expenditures, pose risks to Russia's economic stability.
  • Despite the economic growth, there are concerns about the impact on the general population's living standards, with issues such as labor shortages and the potential for economic overheating.