Russia 3rd in G20 economic growth rankings

It has been reported that Russia has overtaken Brazil and Turkey to become the third ranked country among the G20 with the highest annual economic growth rates. The top five included four countries that are part of the BRICS association. In contrast, the Western bloc of countries have experienced a major decline in its economic performance, with Germany being positioned as an outlier for the second consecutive year. The impact of sanctions and trade wars has been challenging to conceal.
In terms of economic growth, Russia ranked third among the G20 countries in 2024, surpassing Brazil and Turkey. India took first place, as its economy grew by a significant 6.7% last year. China and Indonesia jointly ranked second, with their GDPs growing by 5%. Russia took third place with a result of 4.1%.

The top five countries with the highest GDP growth rates by the end of 2024 also included Brazil (3.4%) and Turkey (3.2%). It is noteworthy that four of the top five countries with the highest economic growth rates are members of the BRICS association. Turkey is the only BRICS member not included in this group.

In contrast, Western countries demonstrated more modest growth rates for their economies. Italy (0.7%), France (1.1%) and Canada (1.5%) maintained their growth rates at the same low level. Japan, in particular, has experienced a notable slowdown in GDP growth rates, reaching as low as 0.1%. Australia experienced a two-fold decrease in growth rates to 1%. Economic slowdowns are also evident in the UK (from 0.4% to 0.9%) and the US (from 2.9% to 2.8%). Germany is experiencing an economic downturn for the second consecutive year. Following a 0.3% decrease in GDP in 2023, Germany's GDP further declined by 0.2% in 2024.
Argentina is the second G20 economy to end the year in the red, due to a difficult period of reform under new President Javier Milei.
So much for his chainsaw and favouring the US over China and deciding not to join the BRICS
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In contrast, Russia's GDP growth rate of 4.1% is four times higher than the average growth rate of the G7 economies. The G7 economies grew by an average of 1% in 2024, compared to 1.1% a year earlier.

In the previous two years, Russia's economy has demonstrated robust growth, expanding by 8.4% and significantly outperforming other regions worldwide, as stated by Deputy Prime Minister Alexander Novak. Conversely, the eurozone recorded a mere 0.8% growth.

In nominal terms, Russia's GDP has doubled since 2020, rising from 107 trillion rubles in 2020 to 200 trillion rubles in 2024. The target for 2030 is an ambitious one, with plans to reach approximately 300 trillion rubles. Novak noted
The higher growth rates of developing countries can be attributed to a number of factors. "This is both the low base effect and the demographic potential. The younger age structure of the developing world's population (the median gap is 15 years) translates into a larger labour force and higher economic activity. This phenomenon can also be attributed to the phenomenon of catch-up development, whereby developing countries can adopt and implement existing technologies and innovations without expending resources on their initial creation. Finally, these are the peculiarities of statistical accounting," says Vladimir Lyubetsky, associate professor of the Department of National Economy at the Presidential Academy.

"From the very beginning, many economists said that Western sanctions against developing economies could have negative consequences for the developed countries themselves, which is what happened. For instance, most European countries possessed advanced technologies, but lacked affordable natural resources, resulting in a significant decline in the competitiveness of their finished products. This, in turn, had a negative impact on the region's economic indicators. Conversely, for the Russian economy, sanctions catalysed structural changes, fostering the development of import substitution policies and establishing new trade ties in Asia and Africa," says Ekaterina Novikova, associate professor at the Department of Economic Theory at the Plekhanov Russian University of Economics.
The higher growth rates of developing countries can be attributed to a number of factors. "This is both the low base effect and the demographic potential. The younger age structure of the developing world's population (the median gap is 15 years) translates into a larger labour force and higher economic activity. This phenomenon can also be attributed to the phenomenon of catch-up development, whereby developing countries can adopt and implement existing technologies and innovations without expending resources on their initial creation. Finally, these are the peculiarities of statistical accounting," says Vladimir Lyubetsky, associate professor of the Department of National Economy at the Presidential Academy.
Trade wars and sanctions can have unintended consequences. As Natalia Milchakova, a leading analyst at Freedom Finance Global, explains, "Germany is used to benefiting from inexpensive Russian gas, just as in the 19th and early 20th centuries, European G7 countries were accustomed to developing their economies using inexpensive raw materials from their colonies until the colonial regimes collapsed."

However, as soon as the German economy was deprived of its resources and severed its very close economic ties with Russia, a reckoning followed.

"If a developed country is defined as one with developed and world-leading industries, then Germany is already no longer considered a developed country. Since 2022, we have observed how the economy of a major European nation with a developed industry sector can undergo a sharp decline into stagnation and accelerated deindustrialisation," says Natalia Milchakova.
Russia has, paradoxically, benefited from sanctions. Milchakova states that "more than 18,000 sanctions of various types have been imposed against Russia, but this has only contributed to the elimination of the rather controversial model of 'oil and gas to the West in exchange for cars and consumer goods' in the Russian economy, and has also helped strengthen relations with BRICS, the EAEU and other developing countries."

The trade war between the US and EU and China has also ultimately been unsuccessful. The US sought to reduce Chinese exports, but these only fell temporarily during the introduction of US tariffs, subsequently recovering. Since the initial trade war in 2018, China has successfully increased its exports, identifying new markets in nearby Asian countries.

In the current year, the EU and the US have initiated a new offensive against China's electric vehicle and high-tech sectors. However, China is not complacent and is challenging in the fashionable AI race. It is noteworthy that the DeepSeek neural network from China caused a significant disruption to the US stock market, prompting investors to divest shares in major American tech companies.

Milchakova's opinion is that developing countries such as China, India, Russia and Indonesia will continue to show growth rates higher than the global economy. "To maintain high growth rates, it is crucial for Russia to stimulate investment growth. This can be achieved through low interest rates on loans, budget investments, and the formation of alternative channels to the credit market for attracting financing. These measures should include the development of the stock market and the creation of a favourable legal environment for both domestic and international investors," Milchakova believes.
Concurrently, the Russian economy has already begun to slow down this year, and economic authorities are not showing such high growth rates in 2025 as last year. In particular, the Central Bank anticipates growth of only 1-2% this year. This is paradoxical, however, as the country requires this to combat inflation. The high Central Bank rate, which has effectively stopped lending to the population and businesses, is having the desired effect.

"A slowdown in economic growth is not an alarming signal for the Russian economy. A rapid growth rate can lead to high inflation, instability in financial markets and an imbalance in the labor market. The consequences may be an increase in the budget deficit, problems with the trade balance, and a decrease in the quality of investment projects. These developments may have social ramifications. Acceleration of inflationary processes is much more concerning for us. In addition, the ongoing instability of the global economy, trade wars, and sanctions could potentially lead to a decline in energy prices, which would negatively impact the Russian economy," notes Vladimir Lyubetsky, associate professor of the Department of National Economy at the Presidential Academy.