World Bank upgrades Russia to ‘high-income country’ as war-driven economy grows
- The country’s GDP grew 3.6 per cent last year amid demand for military goods and services
Russia’s economy has defied sanctions in the two years since Moscow invaded Ukraine in February 2022 – so much so that the World Bank is now classifying Russia as a “high-income country”.
On Monday, the World Bank announced it has upgraded Russia from an upper-middle-income country to a high-income country, according to a report from the financial institution’s economists.
“Economic activity in Russia was influenced by a large increase in military-related activity in 2023,” World Bank economists wrote in their report.
Last year, Russians earned US$14,250 per person on a gross national income basis.
The World Bank’s upgrade confirms reports from Russia that suggest the growth is primarily driven by wartime activities that generate demand for military goods and services, making some sectors winners in Russia’s wartime economy.
Russia’s trade jumped by nearly 7 per cent last year, while activities in the financial sector and construction grew by 6.6 per cent and 3.6 per cent, respectively.
This boosted Russia’s real GDP – which is economic growth adjusted for inflation – by 3.6 per cent.
