Putin: Russia becoming ‘new global growth centre’ as West ‘rests on laurels’

MOSCOW (Reuters) -President Vladimir Putin said on Thursday that economic isolation from the West was only helping Russia to become a new growth centre in a world entering a period of radical change, as the West fell behind.

Russia’s export-focused economy has proved more resilient than either Moscow or its adversaries anticipated when the West sought to punish and isolate it with sweeping sanctions for sending its troops into Ukraine in early 2022.

Putin told the “Russia Calling” business forum in Moscow that gross domestic product (GDP) was set to grow 3.5% this year, rebounding from a 2.1% contraction in 2022.

“Today, GDP is already higher than it was before the Western sanctions attack,” he said.

Russia’s economy has been boosted by a sharp increase in defence spending and manufacturing for the conflict in Ukraine, which Moscow calls a “special military operation”.

But it is also grappling with elevated interest rates that are expected to be raised to 16% next week, high inflation that will end the year well above the central bank’s 4% target, and a labour shortage that has seen unemployment drop to a record low of 2.9% and start putting the brakes on productivity.

WEST ‘RESTING ON LAURELS’

Putin, as he has done on several occasions, lauded the health of the Russian economy and state finances, casting the West’s sanctions as an onslaught that has failed to land any meaningful blows.

“The world has entered an era of radical changes and serious tests not only for specific companies and sectors, but also for whole countries and regions of the world,” Putin said.

“Only a strong, stable and, I stress, sovereign country will be able to pass this phase successfully, to become one of the growth centres of the new global economy.”

Putin said the Western financial system was becoming technologically obsolete.

“It has been resting on its laurels, for so long becoming accustomed to monopolies and exclusivity, to the lack of real alternatives, to the habit of changing nothing, that it is becoming archaic.”

As evidence of Russia’s solidity, Putin said the state budget deficit had narrowed further in November, shrinking to 878 billion roubles ($9.51 billion) or 0.5% of GDP in the first 11 months of the year. That was down from 1.24 trillion roubles a month earlier.

($1 = 92.2860 roubles)

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