10 Jul 2024

Oops... I missed this one... Russia's economy has defied sanctions in the two years since Moscow invaded Ukraine in February 2022

So much so that the World Bank is now classifying Russia as a "high-income country." On Monday 1st of July, the World Bank announced it has upgraded Russia from an upper-middle-income country to a high-income country, according to a report from the financial institution's economists. "Economic activity in Russia was influenced by a large increase in military-related activity in 2023," World Bank economists wrote in their report. Last year, Russians earned $14,250 per person on a gross national income basis. The World Bank's upgrade confirms reports from Russia that suggest the growth is primarily driven by wartime activities that generate demand for military goods and services, making some sectors winners in Russia's wartime economy. Russia's trade jumped by nearly 7% last year, while activities in the financial sector and construction grew by 6.6% and 3.6%, respectively. This boosted Russia's real GDP — which is economic growth adjusted for inflation — by 3.6%. The development has made some poor Russians better off financially, complicating any calculus over how to end the war.

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