Using the April 2024 WEO projections (the July update shows no revisions for 2024 growth and -0.3 ppt for 2025 yoy), we can see the following trajectory for Russian output and Russia’s ex-military output spending.
Figure 1: Russia’s GDP (blue) and GDP excluding military spending (red), all in billions of 2021 rubles. Light green indicates projections. Source: For GDP, IMF World Economic Outlook, April 2024 DatabaseAnd SIPRI (1), SIPRI (2).
The above calculation assumes that military spending is primarily on goods and services, so that spending equals output. It should be kept in mind that GDP does not include depreciation (which has likely increased due to the decline in tank inventories and the obsolescence of equipment dependent on imported inputs).
This means that the growth rate of civilian expenditure is significantly lower than that of GDP.
Figure 2: Russian GDP growth rate over one year (blue) and non-military expenditures of GDP (red), all in billions of 2021 rubles. Light green indicates projections. Source: for GDP, IMF World Economic Outlook, April 2024 DatabaseAnd SIPRI (1), SIPRI (2).
The cumulative increase in GDP in 2023 since 2021 is 2.3%, compared to 0.3% for the ex-military cumulative GDP.
While the IMF and the World Bank forecast positive output growth for 2025, as does the Ministry of Finance’s baseline scenario, The Ministry of Finance’s stress scenario predicts zero growth. Gorodnichenko sees a recession, as this story tells job.
