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Russia, Moscow: "It's a war economy"
Photo: Alexander Zemlianichenko / dpa
The International Monetary Fund (IMF) is “surprised” by the growth of the Russian economy.
In view of the sanctions against Moscow in the wake of the war in Ukraine, economic output was expected to be significantly lower in the fall.
"It's a war economy," said IMF communications director Julie Kozack in Washington.
The Russian economy has a high proportion of military spending, which stimulates production.
“There are also a whole series of social transfers that stimulate consumption.”
However, we are currently also seeing signs of an “overheating of the economy” – such as an increase in inflation.
In the medium term, it is assumed that Russia's economic growth will slow down, said Kozack.
She cited the reasons for this as the country being cut off from the international financial system and having only limited access to technology.
This will have a negative impact on the Russian economy in the future.
"I would also like to point out that Russia has lost some highly qualified workers in terms of human capital."
In January, the IMF predicted growth of 2.6 percent for Russia in 2024 - 1.5 percentage points more than was expected in the fall.
According to the IMF, the reason for the upward correction is high military spending and private consumption supported by wage growth.
The IMF expects growth of 1.1 percent for the coming year.
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