Russian President Vladimir Putin. (Photo: TASS)

“Russia’s GDP is now higher than before the Western sanctions. It is expected to grow by at least 3.5% in 2023. These are positive indicators for the Russian economy,” Putin stressed.

“Russia is the largest economy in Europe and in terms of growth rate, Russia is currently ahead of all leading countries of the European Union,” President Putin said.

Mr Putin said that the unprecedented scale of Western sanctions was a “fierce attack”, but Russia could still overcome it.

“In the consumer market, we are gradually abandoning imposed services, brands and intermediaries. In fact, we are actively developing our market. This naturally leads to positive systemic results,” the Russian President said.

Russia's economy has been boosted by a sharp increase in defense spending and production to support the special military campaign in Ukraine.

But the country is grappling with rising interest rates, set to rise to 16 percent next week, rising inflation that is forecast to be above the central bank's 4 percent target, and a labor shortage that has pushed unemployment to a record low of 2.9 percent, which has hurt productivity.

In a show of Russia's solidity, President Putin said the state budget deficit narrowed further in November, to 878 billion rubles ($9.51 billion), or 0.5% of GDP, down from 2.1% in 2022. That was down from 1.24 trillion rubles a month earlier.

According to the Russian President, there are indicators that the country's economic policy is on the right track. He added that Russia is actively developing the domestic market, domestic business is on the rise and banks are operating "stable and sustainable"./.

Vu Tung