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Putin wants to stay in office. Experts say this would have devastating consequences for the Russian economy. Because the president is faced with a huge pile of broken pieces.
Moscow – Economy plays a big role in the Russian election on March 15th to 17th. “For most Russians who want to ignore the war, the economy is really the biggest issue,” Janis Kluge, an expert on the Russian economy at the German Institute for International Politics and Security, recently said Euronews. That is why Vladimir Putin is apparently trying to present the economic situation as stable and secure shortly before the presidential election. But he is deceiving himself.
Before the Russian election: Putin wants to shine with economic issues
Already during the State of the Union speech, Putin spoke about the economic situation in the context of the elections. In his speech, the Russian president promised social benefits for the next six years, primarily intended to support large families in precarious situations. He also promised higher tax allowances for children and regional social programs, which would be supported by the federal budget, as measures to support families.
The minimum wage should rise from 19,000 rubles (190 euros) per month to 35,000 rubles (350 euros) by 2030. Opposite fr.de an expert had already expressed doubts about Putin’s promises. Putin’s primary concern is to show understanding towards the concerns of the “normal” Russian population.
Putin spreads optimism about Russia’s economy – ahead of the presidential election
According to Kluge, inflation is particularly important for the Russian population. However, the fact that inflation hurts is nothing new. Although the central bank is trying to curb inflation to four percent over the course of the year, it is currently still a long way from that. Russia is currently struggling with inflation of 7.4 percent. (As of February 2024).
Nevertheless, Putin probably likes to cling to the idea that the Western sanctions packages have little impact on the Russian economy and that the economy is recovering despite sanctions. The Russian statistics office also published positive figures in mid-February that showed GDP growth of 3.6 percent in 2023. But the president must be clear about the consequences of the sanctions.
Election in Russia: Can the economy afford a longer term for Putin?
If Putin remains in office for another six years, he is likely to be confronted with the serious long-term consequences of sanctions. Companies are faced with a labor shortage. Loud Euronews Hundreds of thousands of men left the country after fighting began in Ukraine to avoid mobilization. Hundreds of thousands more have signed military contracts.
The slump in the oil and gas business is likely to be of greater concern, as the West wants to put further pressure on Putin’s oil and gas trade. In the latest sanctions package, the USA blacklisted Putin’s ailing ghost fleets and also wants to take action against third countries that circumvent the Russia sanctions. This means that India, among others, could turn its back on Russia in the oil business.
In addition, since the start of the Ukraine war, Putin has switched the economy to a “war economy” mode. Economists see this as the main reason for the strong growth: massive Russian military spending and high payments to volunteer soldiers are stimulating the economy. However, one might think that signs of an “overheated” Russian economy dampen optimism about a significantly positive state of the economy.
Despite the economic situation, Russia remains optimistic ahead of the 2024 election
However, Russia apparently remains hopeful. Economics professor Natalia Subarewitsch allayed concerns about a “quick collapse”: “It definitely won’t be that.” The increased food prices are also bearable for some people. Higher prices “of course concern me – like every consumer, I see them rising,” quoted Euronews the Russian passerby Fedotov, who works in education. “It has to do with the times we live in and they will pass.”
For Putin, the positive view of Russia’s economic condition is likely to play in his cards if he runs again as a candidate in the presidential election. Economic stability “is a signal with which Putin can show the elites that he is still able to mobilize the masses,” said Kluge. However, “it has to be real and not just a manipulated number.” (Bohy)