Russian economy is in a ‘structural shift’ – Putin

Western sanctions have forced the country to focus more on manufacturing than energy exports, and the change has been beneficial, according to the president

The Russian economy is in good shape and rapidly expanding despite pressure from Western sanctions, President Vladimir Putin said during a visit to Vishnevsky Military Hospital in Moscow on Monday.

The head of state noted that the country’s gross domestic product (GDP) grew 3.5% in 2023, which he described as a very promising development after the 2.1% contraction in 2022.

“Our GDP, the key indicator that shows how much our economy has produced… grew 3.5% in 2023. What this tells us is that our economy is functioning steadily. We recuperated our losses and moved forward. This is fundamental,” he stated, noting that while there are still problems facing the economy, like rising inflation, “we’re keeping everything under control.”

Putin noted that this growth stems from changes the country’s economy has gone through over the past year.

“We have never seen anything like that before: while we used to make money from oil and gas [exports], 2023 was the first year when our processing, our manufacturing sector has been growing much faster and generated much more revenue. What we’re witnessing are structural shifts in our economy, and they are very important,” he stated.

The president added that the West’s Ukraine-related sanctions, including Russia’s disconnection from the SWIFT financial messaging system, and the exit of some large Western companies, have failed to cause lingering harm to Russia’s economic stability.

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“The companies that left our market expected the Russian economy to crumble, our businesses and manufacturing to stop running, and thousands of Russians to lose jobs. Our adversaries expected people to take to the streets begging for bread... [but] our economy is stable and our financial system is stable as well,” he stated. Putin noted that unemployment rate in Russia is currently at its historic low of 2.9%, while real household incomes and real disposable income have both substantially increased.

The president also noted that Western departures were beneficial for Russia’s domestic companies.

“Everyone thought that our manufacturing would stop because [the West] stopped supplying components. It didn’t happen. Yes, they created problems, but these problems are being overcome... When certain foreign firms have left, our businesses immediately took over,” Putin said, adding that Russia has enough talent, qualified specialists and managers to “ensure that everything runs smoothly.”

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