The Russian economy has shown resilience against sanctions, with significant growth attributed to effective government policies and strong international partnerships.
High inflation remains a challenge, but the Central Bank's focus on a tight monetary policy aims to stabilize the economy and reduce inflation in the long term.
The ruble's exchange rate fluctuations reflect broader market sentiments and geopolitical factors, but a stabilization is anticipated in the near future.
The potential for increased trade with India highlights the shifting dynamics in global trade relationships, particularly with countries in the Global South.
Russia's GDP growth may slow down in 2025 due to tighter monetary policies, but the economy is expected to adapt and maintain stability.
The ruble is likely to stabilize around 105-106 rubles against the dollar in the coming year, barring significant geopolitical changes.
Increased trade with India and other Global South countries may lead to a shift towards multicurrency settlements, reducing reliance on the dollar.
VTB CEO Andrey Kostin discussed the resilience of the Russian economy amidst ongoing Western sanctions, noting a GDP growth of 3.6% last year and a projected 3.9% to 4% growth for 2024. He attributed this stability to a market-driven economy, effective government policies, and strong trade partnerships with countries like China, India, and Turkey. Kostin emphasized that Russia has successfully adapted its trade flows and maintained a balance of payments surplus despite challenges.
Kostin acknowledged the high inflation rate, which is currently around 9%, and suggested a potential increase in the Central Bank's key interest rate to 23% in December. He indicated that while inflation is a concern, the Central Bank's commitment to a tight monetary policy is crucial for market predictability. He projected a GDP growth slowdown to 1.9-2% in 2025 due to this policy.
The ruble's recent depreciation against the dollar, which exceeded 100 rubles, was partly attributed to emotional market reactions and external sanctions. However, Kostin believes the exchange rate will stabilize around 105-106 rubles in the coming year, supported by high oil prices and a surplus in the balance of payments.
Kostin expressed cautious optimism regarding potential changes in U.S. sanctions under the new administration, noting that while there might be grounds for dialogue, current sentiments in the American elite remain largely Russophobic. He highlighted the importance of increasing cooperation with the Global South, particularly India, where mutual trade is expected to reach $74 billion in 2024.
