As of: February 22, 2024, 6:00 p.m
By: Bona Hyun
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Russia's economy is apparently not doing as well as Putin portrays: The good figures from Moscow about the alleged economic situation are deceptive.
Moscow – Russia and Vladimir Putin are currently boasting about presumably good economic data from Moscow.
Despite the consequences of the Ukraine war, the economy in Russia is expected to continue to grow in 2024.
The organization “The International Monetary Fund” recently estimated economic growth in Russia at 2.6 percent this year.
But doubts about this possible development do not go away.
Putin's economy is feeling the effects of Western sanctions
Even if Russia's economy
is currently "resilient," as some experts suggest, according to
businessinsider , it may only be a matter of time before this situation changes.
Experts note that measures from the West against Russia are having a strong impact and are weakening the Russian economy.
The good figures about Russia's economic situation are clouding.
© Alexander Ryumin/dpa
Benjamin Hilgenstock from the School of Economics in Kiev pointed out to
Deutsche Welle
(DW)
that Russian export revenue from oil and gas has fallen massively in 2023 compared to the previous year due to the sanctions.
The
Reuters
news agency said oil and gas revenues fell 24 percent last year.
According to the think tank “Official Monetary and Financial Institutions Forum”, Ural Crude, Russia’s normally best-selling oil, has also fallen significantly in price.
Sanctions in the Ukraine war are taking effect - Putin's evasion tactics are unsuccessful
There have been recent reports that Russia may have found ways to circumvent Western sanctions.
Putin's shadow fleet of oil tankers is supposed to continue to distribute Russian oil - for example in China or India, in order to defy the oil embargo.
But these evasion tactics have now proven unsuccessful.
According to ship tracking data cited by
Bloomberg
, more than half of the 50 oil tankers sanctioned by the US have remained without Russian cargo since early October.
This is a clear sign of the impact of the sanctions.
Putin is running away from workers - wages are rising and exceeding inflation
Labor shortages also continue to be a problem for the Russian economy.
As of 2022, around 1 million highly qualified workers have left Russia since 2022, according to the research institute Ifri (Institut français des relations Auslands).
The result: The war-related labor shortage in Russia caused wages to rise so much that wage increases exceeded inflation.
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In the first eleven months of 2023, real wages in Russia rose by 7.6 percent compared to the previous year, as Anton Kotyakov
announced on Friday (February 16, 2024), according to the state news agency
Tass .
Real wages have increased by 33.2 percent in the last six years, he added.
"This rise in income was really a driver of the rise in consumer inflation," Hilgenstock told
DW
.
By 2030, the workforce deficit will be between two and four million people.
A labor shortage of this magnitude poses risks for the economy, companies and society, warn the authors of a study by “Yakov and Partners.” The shortage of personnel could reduce potential GDP growth by one to two percent per year and the inflation rate increase to 10 percent, it said.
Excessive military spending is driving Russia's economy to ruin
In addition, the high military spending that Putin is planning for 2024 could cause enormous damage to the Russian economy.
Elina Ribakova told
DW
that the spending was “waste.” The economist at the Peterson Institute for International Economics believes that the high spending could stimulate the production of large quantities of weapons such as missiles and drones.
But: “In the medium term it is not a productive activity,” she told
DW
.
“It’s not good for the economy.”
Economists suspect that the dependence of military spending will be Putin's downfall.
“The enormous spending on this acts like a drug on the economy,” said Vasily Astrov, a Russia expert at the Vienna Institute for International Economic Studies (WIWI).
The Russian economy is operating at the limit of its capacity and is showing increasing signs of “overheating,” said the WIWI.
(bohy)