The recent invasion of Ukraine by Russia has led to the imposition of sanctions by the European Union, causing a significant shift in Russia’s economy. In response to these sanctions, Russia has moved towards a “real war economy,” as European Commissioner for Economy Paolo Gentiloni explains.
The difference in growth expectations between the euro area and Russia is evident in the International Monetary Fund’s prediction of 3.2% growth for Russia in 2024, while the World Bank projects a growth rate of 2.2% for the same year. Despite the sanctions, Russia seems to have found ways to sustain its economy and achieve growth.
Gentiloni highlights that one of the reasons behind this is Russia’s ability to bypass price limits on Russian oil that were imposed by the West. This has allowed the country to continue exporting oil at higher prices and generating revenue, which has contributed significantly to its economic stability.
Overall, despite efforts by Western countries to impose sanctions on Russia following its invasion of Ukraine, it remains unclear how long these restrictions will remain in place or what impact they will have on both sides in terms of economic growth and development.
