Vladimir Putin's ongoing war with Ukraine is boosting Russia's economy, the International Monetary Fund said.
In an update to its World Economic Outlook issued Tuesday, the IMF raised its 2024 growth forecast for Russia from 1.1% to 2.6%. That's the biggest increase it made for any country.
The IMF flagged Russia's high military spending as one factor powering growth. Moscow has allocated nearly a third of its 2024 budget to defense, up from just 14% in 2021 — the year before it invaded Ukraine.
Russia's tight labor market has also helped boost the economy by pushing up wages and consumer spending, according to the IMF. The unemployment rate dropped to a record low of under 3% last year, with many workers emigrating or fighting on the front line in Ukraine.
The IMF's upgrade comes at a time amid rising scrutiny about sanctions against Russia. Moscow has found ways to evade the G7 and EU's $60-a-barrel oil price cap and sold its crude to new buyers such as China and India instead.
"Russia has been living under a sanctions regime for quite a long time, for decades, so we have sufficiently adapted to it," Kremlin's spokesman Dmitry Peskov said in October.
The IMF also lifted its forecasts for the US, China, India and Brazil as it upped its 2024 global growth target from 2.9% to 3.1%. Its cheerier outlook comes after a year where the US managed to dodge a recession and inflation started to cool after central banks aggressively raised interest rates to clamp down on soaring prices.
"The global economy has been surprisingly resilient … the likelihood of a hard economic landing has decreased due to faster disinflation and steady growth," said IMF chief economist Pierre-Olivier Gourrinchas.
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