How is the Russian economy really faring?
According to Russia's Federal Service for State Statistics, the Russian economy grew more than expected over the summer. The GDP rose by 5.5 percent in the third quarter of 2023 year on year, marking the strongest growth since the start of the war against Ukraine. Commentators discusses the implications for Europe's sanctions policy and whether the figures can be trusted.
Arms don't improve living standards
Economics professor Konstantin Sonin explains in Novaya Gazeta Europe why living standards in Russia are only improving on paper:
“The 'GDP growth' that experts are currently discussing is a statistical fiction ... Under normal circumstances a rise in the GDP per capita also shows how much the standards of living have improved. ... In wartime, these indicators diverge. ... This is because the tanks produced here which are burning outside Avdiivka in Ukraine or the missiles fired at Ukrainian cities are included in the GDP, but do not improve the living standards of Russians. If instead of these things it was computers or cars that were being manufactured, or dentists and sports coaches that were providing their services, this would actually have an impact on the standard of living.”
Eggs instead of chicken
In a post on Facebook, journalist Anatoly Nesmiyan explains that there is a shortage of foreign currency in Russia:
“According to the official reports everything is fine, GDP is growing, unemployment is falling, people's incomes are going through the roof - but in real life, people are fighting over eggs, because even the cheapest chicken is no longer affordable for a considerable part of the population. You can go on lying unthinkingly for a long time, and the lies will be believed. But when the TV is switched off, everything looks the way it is. A raw materials-based economic model is risky in itself. But when the leadership has managed to break off relations with all major buyers of export goods and switch to random ones, it's no wonder that the sources of foreign currency are drying up.”
Inept politicians
Data shows that 382,808 tonnes of grain were imported into the EU from Russia via Latvian border checkpoints this year. Neatkarīgā fumes:
“The figures suggest that Latvian politicians, either at the local or European level, have been either lame or even reckless, because they have not worked nearly hard enough to make things difficult for Russia. ... Every additional euro or dollar that is allowed to flow into Russia strengthens the country's military-industrial complex. If European politicians cannot cope with organising arms deliveries, perhaps they can at least shape the legislative and regulatory framework in such a way that Russia's access to foreign currency revenues is restricted as much as possible.”
Ukraine lagging behind
Ukraine's economy must also finally switch to war mode, writes journalist Taras Mokljak in Focus:
“As far as the [Russian] economy is concerned, none of the goals of the Western sanctions - neither a 30 percent drop in Russian GDP nor a 50 percent reduction in imports - have been achieved. Instead, Russia's exports have grown by 20 percent year on year. Today, Russia has virtually unlimited financial resources for the war. ... Ukraine, on the other hand, has no strategy for adapting its economy to the war, which is the only way our country can survive given the political turmoil in the West. ... If we don't change our approach, we will lose.”