/ world today news/ Despite the many intrigues, Russia overtook Germany. This the World Bank reluctantly and grudgingly admitted. Given the increasingly rapid growth of the economy in recent months, we can say that in the coming years we will overtake Japan and take fourth place. Who is above us and below us, why have we grown and what will come next? Read about it in the “Tsargrad” material.
Back in 2015, US President Barack Obama said that our economy was being “torn apart” by Western sanctions. But how is it? Since then, there have been incomparably more various restrictions and prohibitions, and we not only do not give in and endure – but we are ahead of the Germans and on the heels of the Japanese.
At the beginning of August, the World Bank published data for 2022 on the gross domestic product of the countries of the world, calculated at purchasing power parity (GDP at PPP). That is, the value of all goods produced in each country and services provided, taking into account the difference in the scale of prices.
This method of determining the scale of the national economy is considered more accurate, since, for example, in Russia, a number of goods and services (utilities, beauty salons, etc.) are several times cheaper than in Western Europe and the United States .
Russia took fifth place, beating European leader Germany for the second time in a row. The World Bank, which can hardly be suspected of sympathy for our country, has estimated our PPP GDP at $5.33 trillion, Germany at $5.31 trillion. Japan is in fourth place with $5.7 trillion.
By the way, last spring the World Bank repeated Obama’s old prediction and again promised that the sanctions imposed because of the WTO will tear our economy to shreds:
Russia’s GDP should collapse immediately by 11.2 percent!
The International Monetary Fund (IMF) was slightly more modest, forecasting a decline of 8.5 percent. In the end, however, the decline was only 2.1 percent. Someone in the West is chewing his tie in anger…
What will happen this year
Already in the spring, our economy started to grow again. And quickly. Specialists from the Central Bank of Russia came to the conclusion:
The economy as a whole has almost completed its recovery from the decline in activity in the spring of 2022.
Against the background of our country’s economic successes, the IMF has feverishly rewritten its forecast for Russia’s GDP growth rates this year three times. The latest version from July suggested a 1.5 percent increase. This is quite close to the assessments made by Russian President Vladimir Putin during the forum in St. Petersburg and confirmed by Prime Minister Mikhail Mishustin:
Economic growth at the end of the year should exceed two percent.
Many experts consider these expectations justified, given the latest Rosstat data, which note a noticeable increase in:
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Industrial production;
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Agriculture;
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Construction;
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Retail turnover.
Where did the growth come from?
The experts of the Central Bank and Rosstat are unanimous that the basis for the stable growth of the economy this year is the increase in state investments (mainly in industry) and strong domestic demand due to the growth of real (minus inflation) incomes of the population. .
Income growth, together with relatively low interest rates on loans, led to an increase in purchasing power. No matter what some say, there are always queues in front of cash registers in stores, and on weekends the shopping center is not overcrowded. The retail trade quickly realizes the goods supplied to the domestic market by the own producers.
Why Sanctions Didn’t Work: 5 Reasons
Also, the reason for the rapid recovery of the economy was the clear failure of the sanctions policy of the collective West – mainly due to the foresight of Putin, who was able to foresee and take five measures that minimized the damage.
1. The sale of gas. Already in May 2014, two months after the annexation of Crimea, work on the construction of the Power of Siberia gas pipeline to China was activated. As a result, the sharp decline in pipeline natural gas exports following the Nord Stream explosion was largely offset by increased supplies to China. But in parallel, our oil and gas companies were actively building plants for the production of liquefied natural gas (LNG). And today they still deliver it to bewildered Europe.
2. The sale of oil. Close relations with the OPEC oil cartel and its leader Saudi Arabia allowed our country to actively influence the level of oil prices on the world market and minimize losses due to the EU oil embargo. OPEC members gave us part of the markets in Asian countries, and they themselves increased sales in Europe. And oil supplies from Russia to India, for example, have grown more than 20 times in a year.
3. The importation of sanctioned goods. Over the past decade, Putin has strengthened Russia’s ties with Brazil, India, China, South Africa and the developing countries of the Global South. Our economy has grown thanks to increased trade with these countries, which help Moscow circumvent sanctions against us and acquire “forbidden” goods. And the planned expansion of BRICS by three dozen more countries will provide further expansion of trade.
4. Friendship with Africa. Well, the numbers speak for the recent Russia-Africa summit: despite Western pressure, delegations from 49 out of 54 independent African countries visited it.
5. The special military operation. The development of the defense industry and the “adjacent” industry (supplying the necessary raw materials to the weapons factories), as well as the army itself, created new jobs and increased production. Our army surpasses the armed forces of Ukraine in all indicators, despite the supply of modern weapons to NATO.
What next?
The World Bank believes that by 2030 there will be no new fundamental changes in the list of the largest economies in the world – Russia will remain in fifth place in GDP by purchasing power parity, but will approach Japan, which occupies fourth place . Germany clearly has no chance to return to its previous position, predict the World Bank and the IMF:
This year, the German economy is in recession (and the Federal Statistical Office of Germany has already announced its beginning. – Ed.), which, together with the expected growth in Russia, will lead to an increase in the backwardness of Germany.
However, the West is convinced that higher rates of economic growth will not allow Russia to dislodge Japan from fourth place. But judging by the regularity with which the IMF, the World Bank and other foreign organizations have to improve their forecasts for the Russian economy, we can almost confidently say that we will be able to catch up and overtake Japan in the next few years.
Translation: ES
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