Experts told what prevented our country from becoming a leader in GDP growth over the past 23 years
Among the world's major economies, Russia ranked tenth in terms of growth in dollar terms over the 21st century. This conclusion can be drawn from the materials of the International Monetary Fund (IMF) and the World Bank (WB). Over the full 23 years, Russia's GDP has grown 7.7 times — to $2 trillion. What prevented our country from taking a higher position and is it possible to improve it in the future, experts told MK.
< p>Among economies with a GDP of more than $100 billion, Ethiopia was the fastest growing. In the 21st century, it grew 19.4 times, to $160 billion. The silver medal in this competition went to China, whose GDP increased 14.6 times, to $17.7 trillion. And Kazakhstan turned out to be the bronze medalist: it grew 14.2 times. Its economy has reached $261 billion, followed by countries as diverse as Vietnam, Qatar, Romania, Kenya, Bangladesh and Indonesia. The only thing they have in common is the high GDP growth rates over the past 23 years — from 14 to 8 times. Well, Russia is following them. And this is a very worthy position, considering that Russia has dozens of large economies behind it, and this assessment was given to us by not friendly Western financial institutions.
Domestic analysts interviewed by MK called Russia’s entry into the top ten large, rapidly developing economies of the world “success with nuances.” As Mikhail Zeltser, an expert on the stock market at BCS World of Investments, noted, you always want more, but it could have been much worse: the alarmism and expectations of some politicians about the “torn to shreds” of the Russian economy did not materialize, so the actual dynamics are rather satisfactory. “After the start of the SVO, many analysts argued that the Russian economy would collapse in half,” recalls Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers. “But now even the stock market has recovered and private investors play the main role there.”
However, the main “nuance” of the achievements of our country’s economy is associated with its uneven growth. As independent financial expert Andrey Vernikov pointed out, the mining industry, agro-industrial complex and manufacturing sector are dynamically developing in Russia. Advances in the field of high technologies, which provide the greatest added value, are still modest. It was not possible to create a technological world leader on the level of Amazon or Nvidia. And without the development of the high-tech sector, it cannot be stated that the growth of the Russian economy is qualitative. As before, the situation in the Russian economy depends on commodity prices, and it is possible to get away from this dependence only through the development of high technologies. “The further situation in the economy depends on the geopolitical situation,” says Vernikov. “The growth of the last two years is based on the model of state financing of the economy, but the treasury’s capacity is limited.” It must be said that since 2020, trying to overcome the consequences of the pandemic, the state has been actively spending savings. Now we need to build a new model so that state funds replace the funds of private investors. If it is not built, then state financing of the economy will decrease and the rate of GDP growth will also decrease, the financier warned.
At the same time, our country can still surprise analysts, not only at the IMF or World Bank, but even from its own government agencies. Rosstat preliminary estimated the growth of the domestic economy in the first quarter of this year at 5.4%. This coincided with the estimate of the Ministry of Economic Development, but significantly exceeded the data of the Central Bank, which expected growth at 4.6%. “The country is supported by oil and gas revenues, which grew by 82.2% in the first 4 months of 2024 compared to the same period in 2023,” notes Sergei Solovykh, head of the department for working with wealthy clients at Fontvielle Investment Company. “This growth was mainly due to high prices in the energy market and improvements in the tax policy of the Russian Federation.”
At the same time, calculations based on GDP must be treated carefully, since the well-being of people in the country depends on other criteria and here it is more important to monitor, for example, the share of wages in the economy — a parameter in which Russia still lags far behind other developed countries. As Ivan Petrov, Deputy Dean of the Faculty of Economics and Business of the Financial University, noted, increasing GDP is not the main thing for the sustainable development of the state and there is no need to accelerate the pace above those established by the strategic documents of the state. The accepted path to the social development of the country is correct and it does not involve focusing only on GDP growth.