Russia is expected to show at least 2% GDP growth this year, reversing the shrinking it experienced in 2022, according to President Vladimir Putin. In addition, the real wages of Russian citizens have seen double-digit growth recently, Putin said during a meeting with top officials to discuss the country’s economy.
Putin highlighted sectors such as manufacturing, retail, and construction, which have been demonstrating steady growth. He stated that the growth in these sectors, along with measures to support the economy, has had a positive impact on the labor market. Unemployment rates in the country have declined to 3.2%, while real wages have grown at double-digit rates for the first time since 2018, with an increase of more than 10% in April.
Given the positive trends in the Russian economy, Putin expects the country to achieve GDP growth of at least 2%. This growth will help alleviate the losses suffered last year when Russia’s GDP contracted by 2.1%.
The shrinking of the economy came amidst multiple waves of anti-Russian sanctions imposed by the collective West following the conflict between Moscow and Kiev. Despite the challenges, Russian GDP has already risen by 0.5% in the first five months of this year.
However, the country’s economy still requires additional support, and an increase in state debt is expected. The Russian government believes additional borrowing is necessary but aims to keep the debt level under 20% of GDP. Russian Deputy Finance Minister Irina Okladnikova stated that the current level of debt is at 22.8 trillion rubles ($251 billion), which represents 14.9% of GDP. Although this level is considered safe, the government acknowledges the need for increased borrowing due to growing expenditures.
In order to address these financial challenges, the government will work to contain the debt level while ensuring the necessary support for the economy. It is crucial to strike a balance between promoting economic growth and managing the national debt.
Overall, Russia’s economy is showing signs of recovery and growth. With the positive performance of key sectors and the increase in real wages, the country is expected to achieve GDP growth and maintain stable economic conditions. Efforts to manage the national debt and provide additional support will contribute to sustaining and further improving economic performance in the coming months.
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