Russia becomes Europe’s biggest economy outperforming Germany in PPP terms due to strong trade and manufacturing
Russia was among the world’s five largest economies and the largest in Europe in terms of purchasing power parity (PPP) as of the end of 2022, despite Western sanctions, the latest World Economics report has revealed.
According to estimates based on official country data published by the World Bank and the IMF, Russia’s gross domestic product was $5.51 trillion in PPP terms at the end of last year.
The figure is 38% larger than the official estimate of $3.993 trillion, the report noted.It also showed that the Russian economy was ahead of Germany’s when measured in purchasing-power parity, with the latter’s GDP at $5 trillion.
China topped the list as the world’s biggest economy ($31 trillion), followed by the US, India, and Japan. The top 10 also included Indonesia, Brazil, and Türkiye.
The IMF and World Bank both recently raised their forecasts for the Russian economy, saying GDP would continue to grow despite sanctions, underpinned by strong trade and industrial production, as well as higher-than-expected energy revenues.
Russia’s GDP is expected to grow 1.5% this year, an upwards revision from the 0.7% increase that the IMF predicted in its April report.
IMF chief economist Pierre-Olivier Gourinchas acknowledged that Russia was able to maintain “quite a bit of momentum in the economy” by taking very strong fiscal measures.
The current revision reflects a strong first half of the year in a number of sectors such as retail trade, construction and industrial production, which were boosted by fiscal stimulus, according to the IMF.
That follows an estimated 2.1% contraction in 2022, when sweeping international sanctions over Russia’s military operation in Ukraine largely shut out Moscow from Western markets and cut off energy exports to the EU.
According to the World Bank, Russia’s growth is expected to turn positive in 2024, but will remain modest at 1.2%.
The Russian government has maintained a positive outlook for the economy. Prime Minister Mikhail Mishustin has predicted that, by 2024, the Russian economy will be able to overtake developed countries in terms of growth.
- Click to print (Opens in new window)
- Click to share on Reddit (Opens in new window)
- Click to share on Tumblr (Opens in new window)
- Click to share on Pinterest (Opens in new window)
- Click to share on Pocket (Opens in new window)
- Click to share on Telegram (Opens in new window)
- Click to share on WhatsApp (Opens in new window)
- Click to email a link to a friend (Opens in new window)