Why did Russia’s economy grow by 4.6% in January?

In January 2024, the Russian economy experienced an unexpected acceleration, with annual GDP growth reaching 4.6%, up from 4.4% in December. The manufacturing sector played a significant role in supporting GDP, despite increasing sanctions pressure and moderate hydrocarbon prices. It remains uncertain how long this recovery will last, but it demonstrates the Russian economy’s resilience. Furthermore, accelerating growth in the face of extremely tight monetary policy may raise concerns about potential overheating of the economy.

It is worth noting that GDP increased by 3.6% at the end of 2023, marking one of the best results in the past decade. Additionally, the growth rate accelerated towards the end of the year. In January-September 2023, the growth rate amounted to 2.8%. This increase can be attributed to the low base effect, but it should have weakened by January.

The industry sector played a significant role in this growth. According to the Ministry of Economy’s review, production growth accelerated to 4.6% year-on-year in January, surpassing not only December’s 2.7% year-on-year growth but also November 2023’s 4.5% year-on-year growth. Compared to two years ago, growth was 1.6% in January, up from 0.4% in December last year. The increase in dynamics is mainly due to the recovery of growth rates in manufacturing industry, which showed an acceleration in development to 7.5% in January, up from 5.1% in December.

The increase in dynamism is mainly due to the recovery of growth rates in the manufacturing industry, which showed an acceleration in development to 7.5% in January, up from 5.1% in December. This was mainly due to industries focused on domestic demand. Growth was 4.6% in January compared to two years ago, up from 1.9% a month earlier. In January, the mechanical engineering complex, along with the metallurgical and food industries, made the greatest positive contribution to the dynamics of manufacturing. Together, they accounted for 89% of the total output growth.
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Why did Russia’s economy grow by 4.6% in January?

By Rhod Mackenzie In January 2024, the Russian economy experienced an unexpected acceleration, with annual GDP growth reaching 4.6%, up from 4.4% in…