- The “real situation” in the Russian economy is bad, Russian economist Igor Lipsits told Reuters.
- The joyful announcements of the Russian authorities are aimed at making the Kremlin happy, he added.
- He added that about 14% of Russians live below or on the poverty line.
The Kremlin paints a rosy picture of the country’s economy even despite a series of Western sanctions, but “the real situation is bad,” said Igor Lipsits, a prominent Russian economist Reuters.
Official optimistic statements about the Russian economy are not a good gauge of how the Russian economy is doing because the authorities are simply trying to keep the Kremlin happy, Lipsits added.
The economist confirmed these comments to Business Insider.
Lipsits’ comments shed some light on Russia’s seemingly resilient wartime economy, which is thriving on massive military and state spending. This phenomenon perplexes many economists who expected it to collapse after Moscow’s invasion of Ukraine in February 2022.
Russia’s gross domestic product grew by 5.5% in the third quarter compared to last year, reversing the 3.5% decline in the same period last year, official estimates to show.
However, for many Russians locally, this growth does not translate into wealth.
“A large part of Russian society has very low wages,” Lipsits told the news agency.
It doesn’t help that the Russian central bank raised its rate basic interest rate up to 15% support weak ruble It has fallen 16% against the dollar this year, meaning many people are taking on more debt.
About 20 million people in Russia – or 14% of the total population — are on the verge of poverty or already are, Lipsits said.
Official statistics show that in the second quarter of this year, 15.7 million people in Russia lived below the poverty line of 14,184 rubles, or $162 per month.
Lipsits told Reuters he expected at least economic stagnation and a major downturn after the country’s March presidential elections. Incumbent leader Vladimir Putin is expected to win the election.
Lipsits, who lives outside Russia, was a professor at Moscow’s prestigious HSE University. He left the facility on September 1 after the school management unilaterally terminated his remote work contract, he announced. Telegram.
Lipsits is known for writing a Russian economics textbook that was used by high school students for two decades. Ministry of Education of Russia he abandoned it in 2019 after experts decided that some of the content was not patriotic enough.