At first glance they look like bugs. This week, the International Monetary Fund’s analysts released forecasts that the Russian economy will grow in the coming year, while Britain’s will contract. And that Russia will actually grow faster than Germany, Europe’s economic powerhouse.

But there are no mistakes – just twists and turns in all the countries involved.

The numbers would have been hard to imagine in the early days of the war, when Western sanctions sent Russia’s stock market and local currency, the ruble, into free fall and hundreds of international companies – from McDonald’s to Boeing – withdrew from the country. In March 2022, US Treasury Secretary Janet Yellen confidently predicted that “the Russian economy will be devastated”.


The Russians also expected a deeper economic crisis. According to reports, the Russian Ministry of Finance expects GDP to fall by more than 10 percent. As recently as December, a Reuters poll of 15 economists predicted a 2.5 percent decline for the coming year.

Also read: The global HVAC market is forecast to grow by USD 74.02 billion during the period 2023-2027, accelerating to a CAGR of 6.5% during the forecast period

And yet here we are, in early 2023, and the IMF is now forecasting that Russia’s economy, after contracting 2.2 percent last year, will grow again in 2023, by 0.3 percent and then by 2.1 percent in 2024 percent will grow for these European powerhouses? UK expected to shrink 0.6 percent; Germany will still be in the black, but only just; Growth of a feeble 0.1 percent is expected this year.

“On the one hand, the Russian economy is definitely in a very complicated situation,” Sergey Aleksashenko, a former Russian central banker and deputy finance minister, said last month during a call hosted by the Center for Strategic and International Studies. But as for the idea that there was a total “collapse,” he added, “That’s not true.”


The question then arises: How could this have happened?

Better news for Russia on the home front…
The answer begins with two different economic stories: the first about what happened in Russia; and the second on Russia’s ties to the outside world.

Western sanctions were intended to pressure Moscow both domestically and internationally; The idea was to “limp” Russia’s domestic economy and trade relations, as British Prime Minister Boris Johnson put it in late February 2022. The restrictions included measures to cut off the Central Bank of Russia from the international financial system and block its access to invest billions of dollars in assets abroad and evict the country’s private banking industry from the so-called SWIFT system, which allowed it to trade with global markets counterparties to transact business.


The fallout was almost instantaneous. Ordinary Russians, worried about their savings when news of the sanctions hit the headlines, queued at ATMs in early March and rushed to withdraw as much cash as possible, fearing banks could collapse.

But the evidence now shows that Russia experienced some kind of domestic recovery in the second half of 2022. And the paradox is that the war itself helped propel the turnaround.

While spending on various other domestic programs has fallen by about a quarter and certain industries have suffered huge losses (one estimate put Russian auto sales in 2022 likely to end with a staggering 60 percent drop), the domestic wartime economy has expanded — and did — dramatically more than make up for the difference.


According to a recent analysis by the Carnegie Endowment for International Peace, about a third of all spending in this year’s budget goes to the security sector. According to business daily RBC, Russia’s military spending is expected to increase by almost 5 trillion rubles ($71 billion) in 2023, with spending on internal security and law enforcement expected to increase by almost the same amount.

Last month, Russia’s state-owned defense conglomerate Rostec said it “continues to increase the pace and volume of arms production” after ramping up production over the past year. Personnel spending is also rising: in December Moscow announced that it would increase the size of its military from 1 million to 1.5 million – a sign of its struggle in Ukraine but also a confirmation of increased spending in the country’s defense sector.


The defense sector’s production spikes have meant that the overall statistics for Russia’s industry have not been as disastrous as one might have expected. Despite international sanctions, industrial production fell by just 0.1 percent in the first 10 months of 2022. And now let it grow.

“We have to understand that if you produce weapons instead of butter, GDP can grow, and that was definitely the effect in the second half of 2022,” stressed Aleksashenko, the former Russian central banker.

… and a lot of support from other countries
While domestic image has been bolstered by war spending, Russia has continued to trade relatively freely beyond its borders, amounting to tens of billions of dollars – even as sanctions made it difficult for Russian firms to do business with foreign partners.

There are two main reasons for this: Russia’s ability to persuade key trading partners to ignore Western sanctions; and Russia’s vast and diverse natural resources.


Russia continues to occupy a dominant position in the world’s oil and gas markets. It is also the world’s largest exporter of fertilizers. And for many countries, regardless of their stance on the Ukraine war, the sudden abandonment of Russian supplies has proved too costly.

The result: Moscow’s influence in these markets has meant that several countries continue to trade extensively with Moscow, despite the efforts of the United States and its European partners. India is a prime example: while Western nations have struggled to reduce their dependence on Russian energy, India has greatly increased its consumption of Russian oil. In fact, India now imports an estimated 1.2 million barrels of Russian oil each month — 33 times the amount a year earlier, according to Bloomberg data.

NATO ally Turkey also continues to trade with Moscow. In December, for example, it imported 213,000 barrels of Russian diesel every day, the most since at least 2016.

Imports to Russia have also proved more resilient than sanctions headlines suggest as Moscow deepens ties with countries like China and Turkey. Imports from Turkey to Russia, for example, totaled over US$1.3 billion in December, more than double the year-earlier figure.

And in Europe itself, even as the continent hastened to end its dependence on Russian energy, leaders decided that if war broke out, they couldn’t just turn the spigot off. Climate campaigning group Europe Beyond Coal estimates that European Union countries have spent more than $150 billion — that’s right, billions — on Russian fossil fuels since Moscow’s invasion of Ukraine, despite the war.

Problems in Germany and Great Britain
While Russia found ways to trade and support its economy domestically, at least temporarily, its invasion of Ukraine triggered a sudden spike in global energy and food prices. And that, in turn, put pressure on the economies of its rivals, including Britain and Germany.

As reported by Grid, the war caused particular economic trauma for Germany, which was heavily dependent on Russian energy supplies prior to the Russian invasion. Initially, energy prices soared, fueling inflation and straining the wallets of millions of Europeans. The effect has continued; Latest figures showed that retail sales in Germany fell sharply in December from November figures, despite expectations of a slight increase for the holiday season. Analysts had expected a sales increase of 0.2 percent; Official figures showed that they had actually fallen 5.3 percent.

Food and fuel inflation and its impact on the cost of living have hit the UK hardest. It didn’t help that the UK was experiencing its most politically tense year in recent memory (marked by three Prime Ministers and competing economic policies) and that the country is only just beginning to feel the ill effects of Brexit – Britain’s political separation from the European Union, its largest trading partner. As Sophie Hale, chief economist at the Resolution Foundation, an independent London-based think tank, told Grid in November: “If Brexit hadn’t happened, I think the UK would have done better relative to its peers.”

The result: even as Covid-19 restrictions were lifted and economy after economy began to recover, the UK lagged behind its international peers. And now the IMF is predicting that it will actually be the other way around.

And what may seem like an IMF balance sheet misfire to non-economists actually adds up: Russia is faring far better than most pundits expected — even better than some of the economically powerful nations that wanted to punish the Kremlin for its invasion of Ukraine .

Back in May last year, three months after the invasion of Ukraine, Janis Kluge, an expert on the Russian economy at the German Institute for International Security, told Grid: “When [Vladimir] Putin says Russia got over the initial shock of sanctions, you know, that’s hard to argue with.”

Now, almost a year into the war, and despite unprecedented Western action, the statistics suggest it’s still hard to disagree with Putin’s assessment. Maybe even harder than back then.

Thanks to Dave Tepps for editing this article.

Source

https://ukdaily.news/russias-economy-is-now-forecast-to-grow-faster-than-those-of-germany-and-the-uk-in-2023-how-is-that-possible-325956.html

Vl3ly:
At first glance they look like bugs. This week, the International Monetary Fund’s analysts released forecasts that the Russian economy will grow in the coming year, while Britain’s will contract. And that Russia will actually grow faster than Germany, Europe’s economic powerhouse.

But there are no mistakes – just twists and turns in all the countries involved.

The numbers would have been hard to imagine in the early days of the war, when Western sanctions sent Russia’s stock market and local currency, the ruble, into free fall and hundreds of international companies – from McDonald’s to Boeing – withdrew from the country. In March 2022, US Treasury Secretary Janet Yellen confidently predicted that “the Russian economy will be devastated”.


The Russians also expected a deeper economic crisis. According to reports, the Russian Ministry of Finance expects GDP to fall by more than 10 percent. As recently as December, a Reuters poll of 15 economists predicted a 2.5 percent decline for the coming year.

Also read: The global HVAC market is forecast to grow by USD 74.02 billion during the period 2023-2027, accelerating to a CAGR of 6.5% during the forecast period

And yet here we are, in early 2023, and the IMF is now forecasting that Russia’s economy, after contracting 2.2 percent last year, will grow again in 2023, by 0.3 percent and then by 2.1 percent in 2024 percent will grow for these European powerhouses? UK expected to shrink 0.6 percent; Germany will still be in the black, but only just; Growth of a feeble 0.1 percent is expected this year.

“On the one hand, the Russian economy is definitely in a very complicated situation,” Sergey Aleksashenko, a former Russian central banker and deputy finance minister, said last month during a call hosted by the Center for Strategic and International Studies. But as for the idea that there was a total “collapse,” he added, “That’s not true.”


The question then arises: How could this have happened?

Better news for Russia on the home front…
The answer begins with two different economic stories: the first about what happened in Russia; and the second on Russia’s ties to the outside world.

Western sanctions were intended to pressure Moscow both domestically and internationally; The idea was to “limp” Russia’s domestic economy and trade relations, as British Prime Minister Boris Johnson put it in late February 2022. The restrictions included measures to cut off the Central Bank of Russia from the international financial system and block its access to invest billions of dollars in assets abroad and evict the country’s private banking industry from the so-called SWIFT system, which allowed it to trade with global markets counterparties to transact business.


The fallout was almost instantaneous. Ordinary Russians, worried about their savings when news of the sanctions hit the headlines, queued at ATMs in early March and rushed to withdraw as much cash as possible, fearing banks could collapse.

But the evidence now shows that Russia experienced some kind of domestic recovery in the second half of 2022. And the paradox is that the war itself helped propel the turnaround.

While spending on various other domestic programs has fallen by about a quarter and certain industries have suffered huge losses (one estimate put Russian auto sales in 2022 likely to end with a staggering 60 percent drop), the domestic wartime economy has expanded — and did — dramatically more than make up for the difference.


According to a recent analysis by the Carnegie Endowment for International Peace, about a third of all spending in this year’s budget goes to the security sector. According to business daily RBC, Russia’s military spending is expected to increase by almost 5 trillion rubles ($71 billion) in 2023, with spending on internal security and law enforcement expected to increase by almost the same amount.

Last month, Russia’s state-owned defense conglomerate Rostec said it “continues to increase the pace and volume of arms production” after ramping up production over the past year. Personnel spending is also rising: in December Moscow announced that it would increase the size of its military from 1 million to 1.5 million – a sign of its struggle in Ukraine but also a confirmation of increased spending in the country’s defense sector.


The defense sector’s production spikes have meant that the overall statistics for Russia’s industry have not been as disastrous as one might have expected. Despite international sanctions, industrial production fell by just 0.1 percent in the first 10 months of 2022. And now let it grow.

“We have to understand that if you produce weapons instead of butter, GDP can grow, and that was definitely the effect in the second half of 2022,” stressed Aleksashenko, the former Russian central banker.

… and a lot of support from other countries
While domestic image has been bolstered by war spending, Russia has continued to trade relatively freely beyond its borders, amounting to tens of billions of dollars – even as sanctions made it difficult for Russian firms to do business with foreign partners.

There are two main reasons for this: Russia’s ability to persuade key trading partners to ignore Western sanctions; and Russia’s vast and diverse natural resources.


Russia continues to occupy a dominant position in the world’s oil and gas markets. It is also the world’s largest exporter of fertilizers. And for many countries, regardless of their stance on the Ukraine war, the sudden abandonment of Russian supplies has proved too costly.

The result: Moscow’s influence in these markets has meant that several countries continue to trade extensively with Moscow, despite the efforts of the United States and its European partners. India is a prime example: while Western nations have struggled to reduce their dependence on Russian energy, India has greatly increased its consumption of Russian oil. In fact, India now imports an estimated 1.2 million barrels of Russian oil each month — 33 times the amount a year earlier, according to Bloomberg data.

NATO ally Turkey also continues to trade with Moscow. In December, for example, it imported 213,000 barrels of Russian diesel every day, the most since at least 2016.

Imports to Russia have also proved more resilient than sanctions headlines suggest as Moscow deepens ties with countries like China and Turkey. Imports from Turkey to Russia, for example, totaled over US$1.3 billion in December, more than double the year-earlier figure.

And in Europe itself, even as the continent hastened to end its dependence on Russian energy, leaders decided that if war broke out, they couldn’t just turn the spigot off. Climate campaigning group Europe Beyond Coal estimates that European Union countries have spent more than $150 billion — that’s right, billions — on Russian fossil fuels since Moscow’s invasion of Ukraine, despite the war.

Problems in Germany and Great Britain
While Russia found ways to trade and support its economy domestically, at least temporarily, its invasion of Ukraine triggered a sudden spike in global energy and food prices. And that, in turn, put pressure on the economies of its rivals, including Britain and Germany.

As reported by Grid, the war caused particular economic trauma for Germany, which was heavily dependent on Russian energy supplies prior to the Russian invasion. Initially, energy prices soared, fueling inflation and straining the wallets of millions of Europeans. The effect has continued; Latest figures showed that retail sales in Germany fell sharply in December from November figures, despite expectations of a slight increase for the holiday season. Analysts had expected a sales increase of 0.2 percent; Official figures showed that they had actually fallen 5.3 percent.

Food and fuel inflation and its impact on the cost of living have hit the UK hardest. It didn’t help that the UK was experiencing its most politically tense year in recent memory (marked by three Prime Ministers and competing economic policies) and that the country is only just beginning to feel the ill effects of Brexit – Britain’s political separation from the European Union, its largest trading partner. As Sophie Hale, chief economist at the Resolution Foundation, an independent London-based think tank, told Grid in November: “If Brexit hadn’t happened, I think the UK would have done better relative to its peers.”

The result: even as Covid-19 restrictions were lifted and economy after economy began to recover, the UK lagged behind its international peers. And now the IMF is predicting that it will actually be the other way around.

And what may seem like an IMF balance sheet misfire to non-economists actually adds up: Russia is faring far better than most pundits expected — even better than some of the economically powerful nations that wanted to punish the Kremlin for its invasion of Ukraine .

Back in May last year, three months after the invasion of Ukraine, Janis Kluge, an expert on the Russian economy at the German Institute for International Security, told Grid: “When [Vladimir] Putin says Russia got over the initial shock of sanctions, you know, that’s hard to argue with.”

Now, almost a year into the war, and despite unprecedented Western action, the statistics suggest it’s still hard to disagree with Putin’s assessment. Maybe even harder than back then.

Thanks to Dave Tepps for editing this article.

Source

https://ukdaily.news/russias-economy-is-now-forecast-to-grow-faster-than-those-of-germany-and-the-uk-in-2023-how-is-that-possible-325956.html

Any news from the west is false

The sanctions were a great blessing

this is not Western propaganda, because the news sweet dem

Akuruoulo:



Any news from the west is false

Thank u, the narration suit Dem now, dey will not tag it western propaganda

The western media is traditionally anti Russian. Any positive information on Russia from them means the result is so obvious they have no way of hiding it. Even when they reluctantly release a positive info on Russia they will still find a way to dampen the news. This new trend clearly shows the western economies are shooting themselves in the leg. Negotiate, end this war and end the suffering of your people.

tolexy007:



Thank u, the narration suit Dem now, dey will not tag it western propaganda

They are very senseless