Russia's economic growth a boost for Putin before polls

Moscow weathers sanctions better than expected, but labour shortage a challenge

MOSCOW Russia's success in evading a Western oil price cap is helping to drive a recovery in economic growth as President Vladimir Putin prepares to run for reelection, despite the problems caused by labour shortages, inflation and high interest rates.

Russia's Parliament has formally set 2024's presidential election date for March 17.

Mr Putin, 71, said on Dec 8 he would run for president again in the election, a move expected to keep him in power until at least 2030.

Russia's export-focused, US$2.2 trillion (S$3 trillion) economy has ridden the sanctions wave better than either Moscow or the West anticipated when those opposed to the February 2022 invasion of Ukraine sought to punish and isolate Mr Putin's Russia.

Crucially, the West has been unable to effectively curb Russia's oil revenues.

Russia has redirected exports to destinations such as China and India and used the opaque ownership of so-called shadow fleets of ships to circumvent the West's oil price cap.

In November, energy revenues contributed 961.7 billion roubles (S$14 billion) to Russia's budget, compared with just 425.5 billion in January.

With oil revenues recovering, Mr Putin's key domestic challenge will be grappling with a labour shortage, aggravated by 2023's military mobilisation and the emigration of hundreds of thousands of people since Russia invaded Ukraine.

Other economic issues, such as the weak rouble and high inflation and interest rates, risk squeezing households' purchasing power, a particularly sensitive topic as the country goes to the polls.