Page 33 - bne IntelliNews monthly country report Russia February 2024

4.0 Real Economy 4.1 Industrial production
At the VTB "Russia Calls" forum in December, Vladimir Putin and government officials provided an overview of the year's economic performance. Key points include a projected GDP growth of 3.5%, with Putin emphasising a 54% contribution from the manufacturing sector, driven by defence, and a 44% contribution from supporting industries due to wage increases amid a labour market crisis and higher military spending. Real wages have grown by 7%, and disposable incomes by 4.4%. However, there was no mention of declining labour productivity in 2022, expected to grow by 1.7% in 2023. The government is shifting its perspective on low unemployment as a measure of economic health. Additionally, proposals for tax system development are expected in the spring.
4.2 Inflation
The rise in Russian inflation to 7.5% y/y in November is likely to be followed by further increases in the coming months as the economy continues to overheat. This CPI release supports the case for a 100bp
33 RUSSIA Country Report February 2024 www.intellinews.com