Putin says Russia's economy will be among the world's 4th largest in purchasing power terms

Russian President Vladimir Putin delivers his annual address to the Federal Assembly, in Moscow, Russia, February 29, 2024.Credit: Reuters Photo

Russia’s economy would soon be among the world’s four largest in terms of purchasing power parity, said President Vladimir Putin on Thursday.

Leveraging its abundant natural resources, Russia witnessed a significant rebound in its gross domestic product (GDP) last year following a downturn in 2022. However, this growth is largely driven by state-funded arms and ammunition production for the conflict in Ukraine, obscuring underlying issues that continue to impede improvements in the living standards of Russians.

Earlier in January this year, Russian President Vladimir Putin has said that the country has become Europe’s first economy and stands at number fifth in the world in terms of purchasing power parity, according to Russian media outlet TASS.

Since the war began, Russia has been unable to access the substantial portion of its foreign exchange reserves held by its central bank which were blocked in the West as a part of the sanctions for its invasion of Ukraine, according to CNN.

The Russian central bank had claimed then that the quickly disappearing surplus was one of the contributing factors to the Ruble’s decline. In 2023, the currency had lost over 30 per cent of its value, according to CNN.

The Russia-Ukraine war started on February 24, 2022. A day after, the European Union introduced wide-ranging sanctions intended to send a clear signal to Moscow that there would be severe consequences for the war.

The bloc has imposed 11 sanctions packages to date and last week said it would work to shut down loopholes in the existing measures. EU officials have suggested the sanctions could remain in place for years, Al Jazeera reported.

Meanwhile, the Western countries and Kyiv allege that Moscow is engaged in an “unprovoked war of aggression” in Ukraine. On the other hand, Moscow accuses Western powers of using Ukraine to try to weaken and undermine Russia’s own security.

With inputs from agencies.