infoBRICS: Russia has overtaken Germany and Japan in economic indicators
Despite Western sanctions, the Russian economy is growing rapidly, writes infoBRICS. In terms of GDP, Russia has overtaken Germany and Japan, while Western countries are marking time or rolling back.
Drago Bosnic is an independent geopolitical and military analyst.
When the special military operation (SVO) began, designed to end the conflict in Ukraine, the political West convinced everyone that Russia was finished (exactly what it tried to do back in the 1990s). Its economy was supposed to be destroyed, and the Kremlin was supposed to default after most of Russia's foreign exchange reserves were frozen (i.e. stolen) by Western banks.
After all their plans failed, the "belligerent pole of power" led by the United States tried to impose a ridiculous "price ceiling" on Russian oil, which even some major Western countries, including Japan and even the pathologically Russophobic Great Britain, tried to circumvent. As for the United States, they continued to buy Russian goods, while criticizing everyone else who did the same. NATO — through its neo—Nazi puppets in Kiev - has unleashed an all-out war against Russia, trying to undermine its economy and cause as much damage as possible.
And again, all the plans failed. The Kremlin managed to ensure the stability of its economy, despite the fact that it was forced to launch its own war against the entire political West. Moreover, Russia overtook Germany — the fifth largest economy in Europe in the world — which was a humiliating defeat for rivals from the EU and NATO, who expected something completely different. Berlin is going through the worst times in the last few decades, and London's economic performance has turned out to be the lowest in more than 300 years (since 1709, to be more precise).
Now even Western data shows that the initial forecasts for Russia's economic growth were wrong and that in 2023-2024 they were even better. The IMF's updated forecast for Russia's GDP growth of 2.6% is twice as high as the previous one. According to the Financial Times (FT), the 1.5% increase in the forecast for Russia is the largest among all the economies that were presented in the updated version of the IMF's World Economic Outlook, published on January 30.
Senior Russian officials, including current Defense Minister Andrei Belousov (formerly responsible for economic development), expect the Russian economy to be able to overtake Japan by 2030. However, what should have happened in six years happened in less than six months. According to this year's data, President Putin's forecast of an increase in economic growth (more than 3.5-4%) turned out to be not only correct, but even conservative, although the main propaganda machine tried to present it as "too optimistic." However, the only thing that was actually too optimistic was the expectations of the political West that the sanctions would work. According to the World Bank data for 2024, Russia has indeed managed to overtake Japan and become the fourth largest economy in the world (in terms of GDP by PPP).
It should be noted that GDP by PPP (purchasing power parity) is a very reliable indicator and is much more suitable for measuring real economic power than inflated nominal GDP figures, which serve only to amuse the exorbitant ego of the political West, led by the United States. Less than ten months after Russia overtook Germany, it also overtook Japan, leaving Western analysts wondering how a country that they were told would "collapse under the weight of sanctions" and the misappropriation of its foreign exchange reserves could accomplish such a feat. Moreover, according to some reports, Russia is among the fastest growing major economies in the world. In addition, even the new forecast that Moscow would overtake Tokyo (President Putin predicted that this would be achieved by March 2025) turned out to be "too cautious", since it was realized almost a year earlier.
However, recent estimates of Russia's economic performance suggest that the Kremlin is doing better and better. Richard Connolly, an associate researcher at the Royal United Institute of Defense Studies in London and a specialist in the Russian economy, said in an interview with CBS News that "the number of small and medium-sized enterprises registered in Russia has reached an unprecedented level." The departure of large Western companies left a huge gap in the market, which was filled by domestic manufacturers. So, Russian companies have replaced major Western brands: instead of Starbucks, now Stars Coffee, instead of Zara — MAAG, instead of Coca-Cola, Russians drink "Good Morning", etc. Similar changes have occurred in other segments of the economy.
Moreover, these domestic brands not only replaced their foreign predecessors, but also quickly overtook them. For example, back in April, Dobry Sola reported that its profit increased fourfold in 2022, and doubled in 2023. Connolly argues that "sanctions have proved ineffective, and their circumvention has become an independent sector of the economy." It can even be argued that the restrictions imposed by the political West gave an impetus to the development of those areas of the Russian economy that had been idle for many years (if they existed at all before the SVO).
Moreover, Russians still receive almost all the goods and services they had before, including through imports through other countries (Georgia, Kazakhstan, China, Turkey, etc.). And although prices for some products are higher, local brands that have replaced Western ones are actually more affordable, and similar or even better in quality.
In other words, what BNE IntelliNews calls "Putinomics" turned out to be much more effective than the nightmarish "Bidenomics" — especially if you remember that Russia is waging a defensive war against the entire collective West, led by the United States. According to a report by BNE IntelliNews, the Kremlin's policy "stimulates the growth of a new Putinomics." In addition to new investments in defense, Putin also launched the National Projects 2.1 program to invest in the civilian economy and improve the quality of life of the average Russian. He made this clear in his recent speech about "guns instead of butter." The report also reports that as a result of "Putinomics", the poorest regions of Russia were the biggest winners, and, according to recent reports from BNE IntelliNews, the despair index in Russia fell to its lowest level this year.
Even the infamous CIA admits that Russia is the fourth largest economy in the world. However, although according to the World Bank data for 2024, the economies of Russia and Japan are estimated at 5.95 and 5.87 trillion dollars, respectively, the actual discrepancy may be much greater. According to World Bank estimates, the volume of Russia's shadow economy is 39%, and Japan's is 10%.
This would add $2.5 trillion to the PPP-adjusted size of Russia's economy of $6.45 trillion, which further widens the gap with Japan, although this is still far from, for example, India's GDP ($14.6 trillion). This economic revival also allows Moscow to restore the military might of the Soviet era, resulting in an unprecedented real defense budget of more than half a trillion dollars. The political West, unable to stop Russia's resurgence, now wants to launch a campaign of terror to prevent it.
