How is the Russian economy doing after 3 years of war? I will present respective key indicators to readers of Polish Thought. And I'll compare them with the Polish. I don't think anyone's always done that before.
Russia's economy is developing rapidly and shows opposition to further impacts. Fundamental parameters are hard to find in the media, and if anything, it is simply a drop of cognition in a barrel of children. These include economists from prominent universities (like Yale) who claim that Russia's economy is "paralyzed". They inform against the analysis of data, as it is said to be “an advanced narrative”, of course the Kremlin. The problem is that the Western communicative completely ignores real economical data, but it is caught in "possible", "potential" scenarios of economical disaster, which someway cannot come from the beginning of the war.
The 3rd year of war was the second year of fast improvement for Russia. A circumstantial phenomenon erstwhile an economy subject to global restrictions, sanctioned by the richest countries of the world, stripped of half of its abroad exchange reserves, cut off from the richest markets in the planet (more than 60% of global economics), did not fall into crisis. On the contrary, Russia's real GDP growth was 4.1% in 2024.
This is simply a rate of improvement somewhat lower than China (increase +5%), but much better than the leading Western competitors – as fast as 4 times faster than Groups G7. The United States' most dynamic economy grew by 2.8% of GDP. The others are alternatively weak: France +1.1%, United Kingdom +0.9%, Italy +0.5%, Japan +0.1%, and in Germany already the second year is rolling, this year by 0.2% and last year by 0.3%.
It is besides worth comparing the Russian economy with Poland, due to the fact that a closer body shirt, and ours is considered after 2024 as a tiger of the European Union. Last year with GDP growth +2.9% we were the EU leader, and our indicators are closer to Russian than EU. Russia, however, felt this "river" already in 2023, erstwhile we had only +0.1% of GDP growth at the time.
The rapidly increasing Russian economy pays expanding taxes – in 2024 the budget gross increased nominally by 20 percent, real after inflation – by 9.1% the increase is 11%. And what is interesting, the budget receives more and more taxes from "non-raw" income, mainly from industry. In Poland, they increased nominally by 10%, and in reality (inflation 3.6% ) – over 6 percent.
The growth of Russian economics is against all Western forecasts, which are considered by Drakonian advanced interest rates – the rate is 21 percent (in Poland – 5.75%). The Central Bank does not want to let the economy to be overheated and aiming at inflation of 4% makes very attractive savings with advanced inflation, thus reducing current consumption. At the same time, it places prohibitive conditions for credit (both individual and economic) on commercial terms.
With the strong power of the economy (which the full planet is doing today, including China), Russia's budget deficit was only 1.7 percent of GDP in the erstwhile year. It's expected to be down to 0.5% this year, we'll see. In Poland, the budget deficit for the erstwhile year is estimated at 5.7% of GDP, with plans for 2025 being 5.5% of GDP.
The long-wave difference is besides that in Poland, as in Europe and the USA, the budget deficit is permanent, each year the state spends more than it collects. In Russia, in years of prosperity, the budget earns surplus, income is higher than expenditure. In years erstwhile the economy and society request to be powered, spending is higher than income.
Unemployment in Russia remains at historically lowest levels, at the end of last year it reached 2.3%. In Poland, it is 2.6% erstwhile in the euro area it is 6.2%. The Russians' income is growing. Real wage last year increased by 9.1 percent (for comparison – in Poland by 9.5%). Russian society has no reason to complain, as wages increased by 8.2% a year earlier (in Poland unfortunately only 1.1%).
Enough of these indicators! How much can you do? Who cares, after all, there are specified breathtaking political disputes in the media, better than in cabaret or cinema. And this one's got numbers. Enough!
Andrzej Szczęsniak
Think Poland, No. 11-12 (16-23.03.2025)
