Industrial evolution: economic growth rates in the Russian Federation exceeded global rates

Last year, Russia's GDP grew by 4.1% and reached a historic high of Br200 trillion. This became known at a meeting between Vladimir Putin and Mikhail Mishustin on February 7. The President is generally satisfied with the work of the government, as the rate of economic growth in Russia was higher than the world. For the next year, he set a task for the Cabinet to achieve a reduction in inflation, which amounted to 9.52% in 2024. The Prime Minister agreed, noting that the rise in prices could not reduce the incomes of the population: they increased by 8.4% in real terms over the year. Nevertheless, experts say that the economy is overheating. How to ensure its "soft landing" - in the material of "Izvestia".

The situation in the Russian economy at the end of 2024

Vladimir Putin met with Mikhail Mishustin in the Kremlin on February 7. The Prime Minister presented a report on the economic development of the country. The president was satisfied with the results: the Russian government in 2024 showed good work, Vladimir Putin said.

Russia's GDP in 2024 grew by 4.1%, which is 0.2 p.p. more than the official forecast, the Prime Minister stated. As a result, the nominal size of GDP in Russia in 2024 reached a historical maximum and amounted to Br200 trillion. According to Mikhail Mishustin, "industrial production has added 4.6%, which is better than all the preliminary estimates".

The Russian economy has been demonstrating a fairly stable dynamic growth for the second year, having successfully coped with the unprecedented sanctions pressure - unlike many countries that imposed restrictions against Russia, said the head of the Cabinet. The rate of economic growth in Russia turned out to be not only higher than its own initial forecasts, but also higher than in the U.S. and other developed economies, emphasized Vladimir Putin.

- As I see from the official statistics, the U.S. - 2.8% (GDP. - Ed.), this is, in general, a good indicator. In the Eurozone, of course, everything is more modest. I am now talking about the leading economies of Europe. In France the growth rate is 1.1%, and in the Federal Republic of Germany it is minus 0.2%," said the President.

However, the president called the decline in economic growth in European countries solely due to their complexity. But the root of this problem is clear, said Vladimir Putin, obviously alluding to the restrictions imposed against Russia and the refusal to work with Moscow.

However, analysts see in what is happening not only a reason for optimism, but also certain risks. According to Ilya Fedorov, chief economist of BKS Investment World, today the economy is in a phase of overheating: to grow further at the same pace in the conditions of labor shortage and high interest rates is a difficult task. Olga Belenkaya, Head of Macroeconomic Analysis at Finam, agrees. She added: the tax burden on business and some citizens has increased, the ever-increasing sanctions pressure leads to instability in the inflow of foreign currency proceeds from exports, as well as to the lengthening of terms and rising costs of import supplies.

- The economy has already maximally utilized resources that could ensure the continuation of high growth rates. The Central Bank is right that in these conditions further stimulation of demand will go not into economic growth, but into acceleration of inflation. It is important not to undermine the growth of supply by the inaccessibility of credit resources, - says Olga Belenkaya.

Mikhail Mishustin also drew attention to the problem of labor shortage: the Cabinet of Ministers is working to create opportunities to attract personnel to industries that need them. Unemployment in Russia is currently at a record low of 2.3%.

Growth of real incomes of Russians in 2025

One of the most important tasks in the work of the government was to increase the real incomes of Russians. Here, according to the head of the Cabinet, there is already quite a high result: revenues net of taxes, fees and adjusted for inflation increased by 8.4%, and real wages (those goods and services that an employee can buy with the money earned) for 11 months showed an increase of 8.7%.

- This means that people have received more, and here inflation has not been able to reduce the income of the population, - explained Mikhail Mishustin.

In the future, the growth of real disposable income of the population will be affected by high inflation rates and increasing tax rates, believes independent expert Andrei Barkhota.

High inflation today is the main economic challenge, stated the Prime Minister. Although its rate has been declining for six months in a row: at the end of 2024, the figure in the Russian Federation amounted to 9.52%. The President has set the government the task to achieve balanced growth of the Russian economy this year. As Olga Belenkaya noted, the Bank of Russia is pursuing a tight monetary policy for this purpose - to move the Russian economy from the state of "overheating", i.e. a significant excess of demand over production capacity, to a more balanced state. For this purpose, for example, the key rate is at its maximum values of 21%.

- Our baseline scenario for this year will be a "soft landing". Slowdown of economic growth to 1-1.5% and reduction of inflation at best to 5-7% by the end of the year, - said Olga Belenkaya.

Budget policy from this year will become stimulating, and defense, security and social expenditures will play an increasing role. Most likely, enterprises and industries working with state defense contracts and subsidized loans will feel more confident economically than market-oriented companies, the expert emphasized.

At the same time, in 2024, the Russian economy has demonstrated impressive stability and adaptability, so there is every reason to believe that the government will achieve its objectives to reduce inflation, said Venera Shaidullina, associate professor of the Department of Global Financial Markets and Fintech at Plekhanov Russian Economic University. In particular, the Cabinet of Ministers will be able to achieve this through active import substitution and development of domestic production, diversification of the economy and development of the non-resource sector.