The West Wrongly Imagined The Russian Economic Collapse: Putin

During his annual State of the Nation address on Tuesday, President Vladimir Putin said the Russian economy turned out to be more resilient than Western countries thought.

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"The West waged a war against us not only on the military and information front but also on the economic front. But it did not and will not achieve anything," he said, emphasizing that this type of aggression will only affect the West.

"The Russian economy turned out to be much stronger than the West assumed," Putin emphasized, mentioning that his country stability is the consequence of joint work between his administration, the legislature, the Bank of Russia, and the federal entities.

"The gross domestic product (GDP) fell by 2.1 percent in 2022... Last year, however, they predicted the collapse of our economy," Putin said, recalling that the West expected a drop of up to 25 percent.

In March 2022, Putin allocated US$13.4 billion for a macroeconomic program, which allowed not only to stabilize the ruble but to achieve a recovery of its value.

"The participation of the ruble in our international transactions doubled in relation to December 2021 and constitutes the third part of our total operations," he said, adding that Russia and its partners will work towards the formation of a "safe system of international transactions, independent from the U.S. dollar and other Western currencies."

To consolidate the transformation of international trade, Putin asked to create new logistics corridors, among which is the expansion of the Moscow-Kazan highway to China.

"This will considerably expand our economic relations with the Southeast Asian markets," he said, adding that the Black Sea and Azov ports as well as the North-South corridor will open up new routes for cooperation with India, Iran, Pakistan , and other Middle Eastern countries.

To guarantee the Russian economic development, Putin will encourage the transformation of domestic savings into productive long-term investments. 

Russia has entered a new cycle of economic growth qualitatively different from the previous one, with new markets and new scientific, technological, and human bases.

"It will not be about supplies of raw materials abroad, but about the production of high-value goods. This will allow to discover the enormous potential of Russia in all sectors," Putin said.

The Russian leader also highlighted that domestic demand expanded thanks to the almost 20 percent increase in the minimum wage in 2022. The citizen purchasing power will continue to be reinforced as Putin ordered a new 10 percent increase in the minimum wage from 2024.