ISW: Putin claims GDP grew 4.1% in 2024 as cash savings hit historical low

Russian President Vladimir Putin continues to project economic stability amid growing concerns about inflation and rising interest rates, the Institute for the Study of War (ISW) reports. Speaking at the VTB Bank investment forum on 4 December, Putin claimed that Russia’s economy would grow by 4% by the end of 2024, citing a 4.1% increase in Russia’s GDP from January to October 2024.

Ukraine’s intelligence previously noted that Russia aims for a decisive victory over Ukraine by 2026, constrained by medium- to long-term economic and force generation limits. Strained by Western sanctions, labor shortages, and slowing growth, Russia increasingly relies on China, Türkiye, and North Korea for economic and military support.

However, this optimistic projection comes amidst ongoing economic challenges, including rising inflation and an uncertain future.

“Putin is likely attempting to posture economic stability despite reports that Russia may raise key interest rates to 25 percent in December 2024, after the Russian Central Bank already raised the key interest rate to 21 percent in October 2024,” ISW says.

Russia’s Central Bank Head Elvira Nabiullina stated on 4 December that interest rates increase is likely at the upcoming board of directors meeting. Putin acknowledged some of these concerns by calling on the Central Bank to contain inflation, although his comments stopped short of addressing the long-term risks.

According to Russian state outlet RBK, the country’s cash savings have dropped to a historic low. Citing data from the Central Bank, RBK reported that only 15% of Russian citizens’ savings are in cash rubles. VTB Bank’s Deputy Chairperson Georgy Gorshkov predicted that this percentage might fall further by the end of 2024 by “a couple” of points.

Putin also highlighted Russia’s low unemployment rate, which stands at a record 2.3% across the country. He specifically pointed out that the unemployment rate for Russians aged 25 and younger has significantly decreased.

“Putin failed to note that unemployment rates are likely at a record low for youth as many young Russian men are fighting in Ukraine and that Russia is suffering significant labor shortages,” ISW wrote.

Related:

You could close this page. Or you could join our community and help us produce more materials like this. We keep our reporting open and accessible to everyone because we believe in the power of free information. This is why our small, cost-effective team depends on the support of readers like you to bring deliver timely news, quality analysis, and on-the-ground reports about Russia's war against Ukraine and Ukraine's struggle to build a democratic society. A little bit goes a long way: for as little as the cost of one cup of coffee a month, you can help build bridges between Ukraine and the rest of the world, plus become a co-creator and vote for topics we should cover next. Become a patron or see other ways to support. Become a Patron!