Boosted by military orders, Russia’s economy grows by 3.6%
- Moscow releases good news on economy ahead of the March presidential vote
- Result shows Russia’s economy has largely absorbed the effect of Western sanctions
Russia’s economy grew 3.6 per cent last year thanks to a boost in military spending because of the offensive in Ukraine although long-term economic challenges remain, official data showed.
The government Rosstat statistics agency published the figures in a statement on Wednesday, just a few weeks before the expected re-election of President Vladimir Putin.
In 2022, gross domestic product (GDP) had contracted by 1.2 per cent after the initial effects of Western sanctions imposed on Moscow after it sent troops into Ukraine.
The 2023 result shows the economy has largely absorbed the effect of the sanctions, finding ways around them by changes in supply lines and trade partners and through government intervention.
Economic activity was supported by favourable energy prices, easy credit conditions and strong domestic demand because of the defence sector, as well as rising salaries to attract workers in sectors experiencing labour shortfalls.