Exclusive! Putin predicts 4% growth in Russia in 2024 and attributes good performance to the country’s greater technological sovereignty

In response to questions about the Russian economy in 2024, during a press conference held on December 19, 2024, President Vladimir Putin highlighted the challenges and advances facing the country amid global instability. Putin acknowledged the growing sense of global crisis, marked by conflicts and economic difficulties, but highlighted Russia’s resilience in maintaining economic growth.

He pointed out that Russian GDP grew by 3.6% in 2023 and is expected to reach up to 4% in 2024, outperforming major economies such as Germany and Japan. Russia was ranked as Europe’s largest economy in purchasing power parity and the fourth largest in the world. Furthermore, the unemployment rate reached an all-time low of 2.3%, while industrial sectors grew significantly.

Putin attributed part of this success to the strengthening of economic and technological sovereignty, driven by the exit of foreign companies. This movement stimulated the internal market and encouraged the development of national products and technologies. However, he acknowledged challenges such as high inflation, which reached 9.3%, but stated that salaries and disposable income grew in real terms.

The president emphasized that economic growth and sovereignty are interdependent, arguing that a robust economy is essential for Russia’s stability and independence.

Below is the full excerpt (translated exclusively by Cafezinho):

“Anna Suvorova: Before we start taking questions from our staff and our fellow journalists, I would like to ask the first general question.

Recently, everyone has had a disturbing feeling that the world is going crazy, or has already gone crazy, because the potential for conflict is off the table in all parts of the world, and the global economy is struggling. How does Russia manage to not only stay afloat but also continue to grow in this situation?

Vladimir Putin: You know, when everything is calm and life is measured and stable, we get bored. This equates to stagnation, so we crave action. When the action begins, time starts to tick by – or bullets, for that matter. Unfortunately, bullets are what’s going through our heads these days. We are scared, yes, but not in the “all out” kind.

Our economy is the ultimate measure of things. As is traditional, I will start with the economy. Although your question was a bit provocative, I’m going to talk about the economy anyway. The economy is number one; is the cornerstone. It impacts the country’s living standards, general stability and defense capability. The economy is everything.

Russia’s economic situation is generally positive and stable. We are growing despite everything, despite any external threats or attempts at external influence.

As you know, last year Russia increased its GDP by 3.6%, and this year the economy is expected to grow by 3.9%, or possibly even 4%. However, we will have to wait and see the final results, as the year-end numbers will actually be incorporated into these projections in the first quarter of next year, which will be 2025 in this specific case. It is quite possible that this indicator will reach four percent.

What this means is that our economy will have grown by 8% in the last two years. After all, tenths and hundredths of a percent make an insignificant difference. This is what the experts have been telling me – we exchanged opinions this morning. Around eight percent in the past two years, compared with a growth rate of between five and six percent in the United States, one percent in the euro zone and zero in Germany, the EU’s main economy. It seems that next year this country will also have zero growth.

International financial and economic institutions ranked Russia as the largest economy in Europe in terms of volume, in terms of purchasing power parity, and the fourth largest economy in the world. We are behind China, the United States and India. Last year, Russia overtook Germany, and this year we left Japan behind. But this is not the time to be complacent. We will certainly continue to move forward.

There is development everywhere you look and a lot of positive momentum in all sectors. If the eurozone has remained dormant, there are other centers of global development that are moving forward. The situation in the eurozone and the United States is also changing. We need to maintain the momentum we have acquired and transform our economy at its core, from a qualitative perspective.

There are other general performance indicators that have been quite satisfactory, to say the least. Unemployment is the first of these indicators. Every country in the world, and every economy, pays close attention to this number. In the case of Russia, it is at its lowest level ever, 2.3%. We’ve never had anything like this before. That’s my first point.

Second, there has been growth in specific industrial and manufacturing sectors. In fact, industrial production increased by 4.4%, while the processing sector recorded a growth rate of 8.1%, with some of its sectors achieving even higher growth rates.

Of course, inflation has caused some concerns. Just yesterday, as I was preparing for today’s event, I spoke with the Governor of the Central Bank, and Elvira Nabiullina told me that the inflation rate has already reached around 9.2% to 9.3% year to date. That said, salaries increased by 9%, and I’m talking about an increase in real terms, discounting inflation. Furthermore, disposable income has also increased. Therefore, the overall situation is stable and, let me reiterate, solid.

There are certain challenges with inflation and the heating of the economy. Therefore, the government and the Central Bank have sought to ensure a soft landing. Estimates for next year may vary, but we expect the economy to grow at a rate of 2 to 2.5%. This soft landing would allow us to continue improving our macroeconomic performance.

This is what we should aspire to. I think we will probably raise these issues during today’s meeting. Overall, the economy can be described as stable and resilient.

Alexandra Suvorova: I have a follow-up question, considering the numerous issues related to price growth, which we will come back to. You cited Germany and Japan as examples. I would like to focus on the fact that Germany has a zero percent growth rate, which you mentioned as a case previously known for its economic expansion.

Do you think this is perhaps linked to politics and sovereignty? Not long ago, at VTB Forum Russia Calling!, you recalled Gerhard Schroeder’s birthday celebration, noting that all the songs were in English, and none were played in German.

Vladimir Putin: It’s an interesting episode. Some time ago, it was Gerhard Schroeder’s birthday, he invited me and I attended. There was a small concert and, by chance, all the companies performed in English. At the time, I commented: “Even the Hannover women’s choir sang in English.”

There was, however, an ensemble that performed in German: the Kuban Cossack Choir, which accompanied me. Also, this was totally unexpected on my part. I asked, “How did you find out about these songs?” They replied: “Out of respect for the Germans, our hosts, we learned these songs during the trip and performed them in German, including those from the local region where we are now.”

During the break, several participants approached me (I tell this as it really happened) and said: “We are really embarrassed by the fact that only Russian Cossacks performed in German here.”

I told this fact to a colleague who was present at the event, which has now been remembered. You see, sovereignty is a crucial concept; it must reside within us, in our hearts. In the post-war era, I believe that this sense – of homeland and sovereignty – has been somewhat eroded among the German people.

Who are Europeans, after all? They are proud to be European, but they are first and foremost French, German, Italian, Spanish and then European. There is a tendency to smooth things out, to homogenize. Ultimately, this affects everything, including the economy.

I spoke earlier about our economic growth – this is largely due to the strengthening of sovereignty, which extends to the economic domain.

Many foreign manufacturers have left our market. What was the consequence? Our entrepreneurs began to produce these products internally, which required more research and the involvement of institutions, including those focused on development. All of this – what we are discussing – is the improvement of technological sovereignty.

Sovereignty manifests itself in several forms: defense, technology, science, education, culture. This is of paramount importance, especially for our nation, because if we lose sovereignty, we risk losing statehood. This is the crucial point.

Economic growth is also an effect of enhanced sovereignty.”