UN reports on the success of the Russian economy

ByRhod Mackenzie
The UN has acknowledged that Russia’s economy has experienced growth, which is an accomplishment that few G20 countries have attained. Despite the sanctions, Russia’s overall exports have remained relatively unchanged, oil and gas revenues are now experiencing monthly growth. However, it is still premature for the country to relax as there are obstacles that need to be overcome
The UN has identified Russia as one of the G20 countries expected to see enhanced economic growth in 2023. Among the G20 nations, only Brazil, China, Japan and Mexico are still expected to experience economic growth. According to the United Nations Conference on Trade and Development (UNCTAD) report, Russia’s GDP is expected to grow by 2.2% and 2% in 2023 and 2024, respectively.

Despite the sanctions imposed against Russia by the US/EU/G7 since the beginning of the SMO in the Ukraine , the total volume of Russian oil and gas exports – the primary source of the country’s foreign currency – have remained largely unchanged. Although gas exports saw a decline of 32% in 2022, oil exports have remained stable at 3 million barrels per day. Notably, oil constitutes 75% of all energy exports. Plus Russia has redirected its trade routes, shifting from the EU and the US to India and China.

However, the West has managed to decrease Russian export revenues, resulting in a 47% drop in the first half of 2023 according to the UN. As a response, Russia collaborated with the Saudis within OPEC+ to reduce production and exports,this move has led to an increase in prices. The UN report stated that it remains to be seen if this will yield the desired outcome.
“The proportion of Russian oil and petroleum products in the global market is significant, making it difficult to isolatethem without causing serious economic damage on the rest of the world. The impact of sanctions, specifically the oil price ceiling and export restrictions on technological products to Russia, have not been significant so far. It is because the Russian economy has adapted to these restrictions by redirecting its foreign trade and financial flows through third party countries,” according to Olga Belenkaya, who heads the macroeconomic analysis department at “Finam.”

The economist observed that domestic demand has exceeded expectations, with both in household consumption and investment growing rapidly. “Domestic demand has rebounded to the level of the fourth quarter of 2021, primarily due to substantial government spending, budgetary payments to citizens, preferential lending initiatives, and a swift resumption of imports,” according to Belenkaya.
None of the OPEC+ countries have exhibited negative economic dynamics. The increase in oil prices only enhances theirs and Russia’s position.

The pivot away from the Weste has proven to be the ‘correct’ for strategy Russia, with China, and India,receiving significant quantities of cheap oil. Combined with rising oil and gas imports, both the Chinese and Indian car production records have been updated. There is unparalleled resource optimisation unfolding in Russia. Moreover, alongside income from oil and gas, there was an increase in income from grain exports. According to Alexander Timofeev, Ph. D., Associate Professor at the Department of Informatics at the Russian Economic University,. the transfer of payments into national currencies with the rising economies of the BRICS countries also bolstered Russia’s economy. .

Ministry of Finance data has revealed that Russia’s oil and gas revenues have begun to increase after the surge in the price of oil. Even export volumes have risen, averaging 3.3 million barrels of oil per day in the last month. The price of the Russian Urals grade has surpassed $80 per barrel, way above the G7 countries’ price ceiling of $60 per barrel.
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UN reports on the success of the Russian economy

The UN has acknowledged that Russia’s economy has experienced growth, which is an accomplishment that few G20 countries have attained. Despite the…