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Russia’s economy, which has been hit by sanctions, will contract less than previously forecast this year and return to growth in 2024, supported by domestic demand and investment, Russia’s economic development minister said on Wednesday.
Economic Development Minister Maxim Reshetnikov told the upper house of parliament that gross domestic product will contract by 2.9%, up from a previous forecast of -4%.
The International Monetary Fund forecasts that Russia will contract by 6% this year.
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A series of unprecedented Western sanctions on the conflict in Ukraine have battered the country’s economy.
GDP will contract by 0.8% next year due to a drop in exports, Reshetnikov said.
But it will grow by 2.6% by 2024 due to “increased levels of domestic demand, consumption and investment,” he said.
The minister added that a “shift” of Russian oil and gas exports to “neutral countries” will help support economic activity in 2024-25.
Reshetnikov’s remarks came hours after Russian President Vladimir Putin ordered a partial military mobilization in Russia, and Moscow’s escalating offensive in Ukraine could have economic consequences.
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