UPDATE 1-Putin: Russian GDP to grow 3.5% this year as West "rests on laurels"

President Vladimir Putin said Russia's gross domestic product (GDP) was set to grow 3.5% this year, as the economy rebounds from a 2.1% contraction in 2022. Russia's export-focused economy has proved more resilient than either Moscow or its adversaries anticipated when the West sought to punish and isolate Russia with sweeping sanctions after it sent troops into Ukraine in early 2022.

President Vladimir Putin said Russia's gross domestic product (GDP) was set to grow 3.5% this year, as the economy rebounds from a 2.1% contraction in 2022.

Russia's export-focused economy has proved more resilient than either Moscow or its adversaries anticipated when the West sought to punish and isolate Russia with sweeping sanctions after it sent troops into Ukraine in early 2022. "Today, GDP is already higher than it was before the Western sanctions attack," Putin told the "Russia Calling" business forum in Moscow. "It's expected that for this year ... GDP will increase by at least 3.5%."

The Russian economy has been boosted by a sharp increase in defence spending and manufacturing for the conflict in Ukraine, which Moscow calls a "special military operation". But it is grappling with elevated interest rates that are expected to be raised to 16% next week, high inflation that will end the year well above the central bank's 4% target and a labour shortage that has seen unemployment drop to a record low of 2.9% and start putting the brakes on productivity.

Putin, as he has done on several occasions, lauded the health of the Russian economy and state finances, casting the West's sanctions as an onslaught that has failed to land any meaningful blows. "The Western financial system is clearly becoming technologically obsolete," Putin said. "It has been resting on its laurels for so long, becoming accustomed to monopolies and exclusivity, to the lack of real alternatives, to the habit of changing nothing, becoming archaic."

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