Staunton, Oct. 2 – At a recent online meeting on economic issues, Vladimir Putin calimed three times that the Russian economy had recovered from what he described as its pandemic-induced recession, but figures from his own government show that his claim cannot be taken seriously, Valery Kizilov says.
The editor of Ekonomicheskaya politika says that some of Putin’s claims are based on sleight of hand, talking about percentage growth from the bottom of the recession rather than about any comparison with where the economy was before it began its slide over the last two years (https://theins.ru/opinions/kizilov/245389).
But most of it is based on the economic boost that has come from increasing indebtedness on the part of the population, Russian production of environmentally harmful materials for China, increases in metal and wood prices, and the militarization of the economy in support of his foreign policy goals.
What has not happened this year is any boost in the real incomes of the population or of production in basic branches, as even government figures show. Those have continued to stagnate or decline, something that would not be the case if the economy were really growing as the Kremlin leader insists it now is.
GDP expressed in physical terms did manage to increase in the first half of 2021 by 1.2 percent over the first half of 2019, but that is within the statistical margin of error. And even that was achieved by increasing indebtedness of the population which allowed the financial sector to achieve great growth and cover declines in most other sectors.
Moreover, Kisilov continues, 2019 was hardly a great year. In those 12 months, Russia produced fewer cars than it did 11 years earlier, a sign that the economy was not growing then and was certainly not serving the needs and interests of the population. What did grow was chemical processing other countries didn’t want to conduct at home, and militarization.
In excruciating statistical detail, the economist shows that the Russian economy did grow slightly as Putin claims from the recession of last year, but he also demonstrates that GDP is a poor measure for talking about the economy of a country where inflation, exchange rates, and a government willing to sacrifice the population to serve itself is in place.