Western sanctions have so far failed to halt Russia’s economic growth, which is now projected to outpace that of the Eurozone, the Guardian reported on Thursday, citing investment firm Amundi.
According to the company’s forecast, Russia’s gross domestic product (GDP) will grow by 1.5% in 2024. In contrast, the Eurozone economy is set to expand by mere 0.5% next year, according to Amundi, Europe’s largest fund manager in terms of assets.
“It means that the United States, Europe, Japan, Australia – the major developed countries – are unable to sanction a country effectively… We can deplore it, but it’s a reality,” Amundi CIO Vincent Mortier said at a news conference in Paris.
Mortier noted that while sanctions have had some impact on certain Russian individuals and entities, whose assets have been frozen over the past 20 months, Russia’s imports and exports remain virtually unaffected. After losing access to Western markets, Russia successfully reoriented most of its trade to its BRICS partners (Brazil, India, China and South Africa) and countries such as Türkiye and Kazakhstan, which have greatly benefited from the boost in trade with the sanctioned country, Mortier said.
“It’s a reality check. In the end, if we take stock of the war in Ukraine: Europe has suffered directly and strongly; for the United States [the impact is] neutral; but Türkiye, Central Asia and Asia more generally have benefited,” he added.
Russia has faced unprecedented economic sanctions from the West over the Ukraine conflict since last year, pushing the economy into a 2.1% contraction as of the end of 2022. However, recent data shows that the country has since largely adapted to the restrictions, with the Russian Finance Ministry forecasting growth of 3% by the end of the year.
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Many international organizations have also recently upgraded their economic forecasts for Russia. The European Commission expects Russia’s GDP to grow by 2% this year on the back of “stronger-than-earlier expected domestic demand underpinned by fiscal stimulus,” and to expand by 1.6% in both 2024 and 2025.
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