Egg crisis survived?
Russian economy is growing strongly
February 7, 2024, 10:03 p.m
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Despite Western sanctions, the Russian economy is doing anything but bad at the moment. After a decline in the first year of the war, GDP will grow again in 2023. Moscow explains the good figures with consumer demand and investments. Foreign experts give other reasons.
A few weeks before the expected re-election of President Vladimir Putin in Russia, the state statistics office published positive economic data for the past year. In 2023, the Russian economy grew by 3.6 percent compared to 2022, the Rosstat authority said based on initial calculations in Moscow. In 2022, the gross domestic product (GDP) shrank by 1.2 percent. That was the year in which Russia began the war of aggression against Ukraine and was hit with many sanctions. In the pre-war year 2021, the economy grew by 5.9 percent, in the first Corona year 2020 it shrank by 2.7 percent.
The basis of last year’s recovery were internal factors such as consumer demand and investments, said Economy Minister Maxim Reshetnikov, according to the Tass agency. Real incomes grew 4.6 percent last year, he said. Sales in Russian retail increased by 6.4 percent.
GDP growth in Russia was also expected by foreign experts. But they attribute it primarily to increased government spending on armaments and the military. The wage payments as well as compensation for those injured or killed provide many Russian families with more money. Because of the shortage of workers, wages are rising. According to the Russian Ministry of Finance, the national deficit remained constant at 1.9 percent despite sharply increased government spending.
Rosstat linked the macroeconomic data with information on the price development of eggs and gasoline. The price increases of the past few months have caused discontent among the population for both goods. The authority has now announced that egg prices have fallen by 2.6 percent since the beginning of the year. Gasoline has become a few kopecks cheaper in the past week. However, the price of diesel has increased. Putin wants to secure another six-year term in office with the vote on March 17th.