Russia has admitted that its economy was on the verge of collapse last year but is now claiming to have overcome Western sanctions and is on track for strong growth this year. Kremlin spokesperson Dmitry Peskov made the rare admission in an interview with Russia’s state-run news agency TASS on Sunday. He attributed the economic pressure to sanctions imposed after Russia’s invasion of Ukraine, including cutting off the country from around $300 billion in foreign exchange reserves, excluding its banks from the SWIFT network, and imposing a ban and $60 price cap on Russian oil. However, Peskov stated that Russia has successfully recovered and is now entering a growth phase. The Kremlin is predicting a potential growth rate of 3% this year, surpassing the International Monetary Fund’s projection of 2.2%. Peskov credited insightful decisions by the country’s leadership and the hard work of the government for stabilizing the economic situation and achieving unexpected growth. This statement is a rare acknowledgement of the effectiveness of sanctions by Russian officials who have typically shown defiance in the face of Western trade restrictions. Despite Russia’s claims of strong economic growth, experts and observers remain skeptical about the country’s financial future. The auto industry has almost completely collapsed, inflation is high, and the value of the ruble has plummeted. There are concerns that Russia’s economy could be on the brink of collapse as it continues its war against Ukraine and allocates record-high funds for its military budget in 2024. Two Yale researchers have also suggested that Russia’s economic projections are based on selective data and that the war is depleting all available resources.
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