Russian President Vladimir Putin has said the country's economy is on the fight track amid the Ukraine war, claiming that the West's prediction of economic ruin for Russia was misplaced. The Russian president said the country's unemployment rate has dropped to a historic low of 3.6 percent.
"The unemployment rate was at a historic low, even before the pandemic, our unemployment rate was 4.7 per cent, and the latest labour market data (shows) it is 3.6 percent," Putin said. The president also said the factories are working and domestic trade is robust. There is also an increase in incomes as well.
"I think nobody expected that. Everyone expected that plants will stop. They are functioning. The unemployment rate goes down. Incomes have a slight uptick. All that leads to growth of domestic trade and its volumes. This is a very good indicator," Putin said, according to a Xinhua report.
Putin also said agricultural output also remains strong due to a good harvest season. "The Agriculture Minister reported to me two days ago that (the harvest) is already about 153-155 million metric tonnes. This is actually the record throughout the contemporary history of Russia and nothing of the kind occurred in Soviet times," the president added.
Though crippling Western sanctions on Russia hit its banks, tech industry and the super rich, the country in general has been spared the worst impacts of a disastrous war. The Associated Press observed as much in a recent report. "After a year of far-reaching restrictions aimed at degrading Moscow's war chest, economic life for ordinary Russians doesn't look all that different than it did before the invasion of Ukraine," the AP report said.
The report adds that there is no mass unemployment, the Russian rouble has not plunged and there aren't any long lines in front of banks. Despite sanctions, international brands are still available in the supermarkets, the report said. "Economically, nothing has changed ... I work as I used to work, I go shopping as I used to. Well, maybe the prices have risen a little bit, but not in such a way that it is very noticeable," the news agency quoted a Television industry employee as saying.
Sanctions on Russia
The center-piece of the Western strategy to counter Russia in the aftermath of the Ukraine war was economic sanctions. The United States, UK and the European Union rolled out crippling sanctions against Moscow with surprising alacrity. The expectation was that the sanctions would destroy Russia's economy, forcing the Kremlin to roll back its ambitious military goals in Ukraine quickly.
The sanctions met some of their immediate goals. Russian assets abroad were frozen, the country's sovereign ratings dipped and Moscow was forced into a technical default on its bonds.
However, data showed last year that Russia's revenue from energy export increased beyond conservative expectations. A Finland-based think tank has calculated that Russia made $158 billion (Ã¢'Â¬158 billion) in energy exports in the six months of the war, from February 24 to August 24.
A Russian economy ministry document showed that it expects energy output and exports will stay elevated until the end of 2025. This happens primarily because of two factors - Russia has been increasing production and Russia's Asian customers like China, India, Japan and South Korea have been increasing purchase.
Analysts now calculate that Russia is not likely to see its coffers getting empty this year as it has significant amounts of reserve money. Adding to this, the Kremlin has been successful in forging meaningful economic partnerships with a string of allies in Asia, including heavyweights like India and China.