bc.game Commentary: GDP is not the best measure of a nation’s success

SINGAPORE: Two and a half years on from Russia’s invasion of Ukrainebc.game, the fighting shows no signs of abating.

Since the war began in February 2022, Moscow has faced increasing international isolation and a broad swath of economic sanctions imposed by Western nations, particularly on its primary export commodity, oil.

And yet, its economy has proven remarkably resilient. Or has it?

In July, the International Monetary Fund maintained its 2024 real GDP growth forecast for Russia at 3.2 per cent, faster than its projections for all advanced economies. In the second quarter, Russia’s economy grew by 4 per cent. 

However, Russia’s strong economic growth belies underlying weakness in terms of its labour market, productivity and investment in the drivers of long-term economic growth.

It is a reminder of the shortcomings of GDP growth as an indicator of sustainable economic development, besides the well-known limitations of GDP as a measure of living standards.

It is therefore important to pay attention to the quality of economic growth and to consider, in particular, the factors that underpin future economic potential.

These include investment in physical and human capitalbc.game, technology and firm capabilities, as well as social and environmental programmes, all of which have a significant bearing on a country’s long-term prospects. 

Pedestrians walk past the Russian Central Bank headquarters in Moscow on Jun 7, 2024. (Photo: AFP/Natalia Kolesnikova)

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