War in Ukraine: in Russia, doubt is instilled in the face of the real economic situation of the country

In Russia, the question rises : what is the real economic situation of the country, today the most sanctioned in the world, cut off from a large part of the world economy, deprived of part of its reserves – frozen – and of which large parts of the industry are struggling to find suppliers to replace Western products? According to the FinancialTimes, several Russian economic officials, including the Governor of the Central Bank, are trying to pressure the government to republish certain economic statistics that are now kept secret. The authorities continue to claim that Russia is resisting American and European sanctions.

Monday, January 30, Komsomolskaya Pravdaa tabloid, close to power, title as follows : “The Russian Economic Miracle: Why Russia Has Lower Inflation and Unemployment Than Europe”. A leitmotif for this tabloid close to power which takes up one of the great mantras hammered home by Vladimir Putin: the Russian economy was to collapse under the effect of the sanctions, according to many experts, but that is not the case. , and it is even the opposite. Every Russian can actually see in his daily life that the big crash did not occur. Shops are stocked, public services are running, and theaters, for example, are always full.

Officially, Russian GDP only contracted by 2.5% last year. Unemployment is now at 4%, a historically low rate, and inflation today seems to be under control after a sharp rise in the spring of 2022. But today, doubt exists about the reliability of these government figures.

Classified data since the war in Ukraine

Already, during the Covid-19 crisis, the Russian government had notoriously underestimated the number of deaths. From an economic point of view, certain figures have simply not been published since the start of the war. Foreign trade statistics or the level of foreign exchange reserves are now classified, considered as “sensitive within the framework of the hybrid war carried out by the West” to use the terminology of the regime. However, these figures are precisely the ones needed to assess the real impact of the sanctions on the Russian economy, and their medium and long-term effects.

According to FinancialTimes, this opacity ended up causing problems for some Russian economic elites, including the highly respected Governor of the Central Bank, Elvira Nabiullina. All plead in favor of a return to the publication of these figures, because the lack of transparency ends up turning against the Russian economy. This opacity could scare away investors who would not have a guarantee.

The “silent crash” hypothesis

Even if the big crash promised by some Western leaders has not taken place, the industry, in particular, is struggling in the face of sanctions. An example: the Lada group is struggling to get cars off its lines at the moment and has just announced that the cars will now only be available in three colors: white, black and dark green. The builder cannot find any other paints. Beyond the anecdote, it is a real revealer of what the Russian economy is undergoing, which in addition has seen hundreds of thousands of men, often the most qualified, the best trained, leave the country to escape to mobilization.

For some experts, the GDP does not collapse because it is supported by the defense industry, but in the long term this does not structure an economy. Some speak of a “silent crash”. But in the absence of reliable figures, everyone can draw the balance sheet they want.

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