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Russian GDP growth to top expectations – state development bank

The economy has largely recovered from last year’s sanctions-induced slump, according to VEB

The Russian economy could expand beyond previous projections this year, Andrey Klepach, chief economist at the Russian state development corporation VEB.RF, predicted on Thursday.

According to Klepach, gross domestic product (GDP) growth by the end of the year could reach 3.2-3.3%.

The macroeconomics, especially this year, rather pleases us, because the results are indeed better than everyone expected,” Klepach said during the plenary session of the Cities of Russia forum in Yekaterinburg.

The analyst expects the real incomes of the Russian population to grow by some 5% this year, despite inflationary pressures.

The Russian Ministry of Economic Development previously forecast that GDP would grow 2.8% in 2023. However, last week, the head of the ministry, Maxim Reshetnikov, said he expects better performance given the growth rate of the previous two quarters, and raised the projection to 3%. The economy showed significant growth in both the second (4.9%) and the third (5.1%) quarters, according to estimates from the central bank. The regulator expects 2.2-2.7% annual growth by the year’s end.

READ MORE: EU sharply upgrades Russian economy forecast

Russia has faced unprecedented economic sanctions from the West over the Ukraine conflict since last year, pushing the economy into a 2.1% contraction as of the end of 2022. However, recent data shows that the country has already mostly recovered from that slump.

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