As of: March 12, 2024, 1:48 p.m
By: Bona Hyun
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Press
Split
Russian President Vladimir Putin is trying to distract from economic problems.
© Mikhail Metzel/dpa
Shortly before the Russia election, Putin could benefit from good economic data.
Does the president have better control of the economy than he thought?
Moscow – Only a few days before the presidential election, Vladimir Putin could apparently score points with economic issues.
New data on the Russian economy is due
to be published on March 13, according to
The Economist .
First of all, there is a positive trend towards economic development in Russia - despite sanctions and the war in Ukraine.
Despite Putin sanctions?
Positive economic data can be expected
The Economist
speculates in its latest article (March 10) that the data is likely to show a leveling off of inflation in Russia.
An increase in inflation is not expected.
In addition, The Economist
expects
that prices in Russia rose by only 0.6 percent in February 2024 compared to the previous month.
For comparison: towards the end of 2023 it rose by 1.1 percent.
It was only in February that the Russian statistics office presented positive economic figures despite sanctions.
The gross domestic product (GDP) rose by 3.6 percent, as the Rosstat statistics service announced.
In 2022, when Russia began the war against Ukraine disguised as a “special military operation,” the economy had collapsed by 1.2 percent.
How is Russia's economy doing?
Oil and gas profits increased despite sanctions
The increased profits from Russian oil and gas business are also likely to be surprising: In February 2024, revenue from oil and gas trading rose by more than 80 percent to over $10 billion compared to the same month last year.
This was reported by
Bloomberg.
The Russian Finance Ministry said on Tuesday (March 5) that budget revenues from taxes on oil and gas totaled 945.6 billion rubles ($10.4 billion) last month.
So is the Russian economy recovering better than expected - and is this evidence of Putin's successful evasion tactics?
Skepticism about Russia's good economic situation - Putin spends a lot of money on the military
According to experts, Russia's economic growth is primarily due to high war spending and government subsidies.
And that will cost Putin dearly in the long run.
Because while Putin is spending more and more money on the military, other sectors of the economy are feeling the consequences.
In the civil economy, the GDP increases are only partially felt.
Wages and pensions in Russia cannot keep up with the still stubborn inflation.
It averaged 7.3 percent in 2023, after more than eleven percent in 2022.
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Putin could soon pay a high price: current economic growth is not “sustainable”
“I do not consider the current economic growth to be sustainable or qualitative,” Yevgeny Nadorshin, chief economist at PF Capital, told Handelsblatt
:
“I see it as a harbinger of an impending economic crisis, perhaps the first since 2004, which may not even require an external shock. “
Elvira Nabiullina, President of the Russian Central Bank, warned back in December 2023 that the Russian economy was in danger of “overheating.”
The Russian central bank recently raised interest rates to 16 percent.
“Imagine the economy like a car.
If you try to drive faster than the vehicle specifications allow, sooner or later the engine will overheat and we will not be able to cover a long distance.
We may go fast, but only for a short period of time,” Nabiullina explained.
Before the Russia election, Putin is making promises for the economy
Even if Putin tries to cover up the economic problems, reality will catch up with him.
During his State of the Nation address, he promised measures to improve the socio-economic situation.
Families with large children in particular should receive more support - but these are probably nothing more than empty words.
(bohy)