Tags: russian economy | decline | prediction | sanctions | vladimir putin

Economist Predicts Big Decline in Russian Economy

vladimir putin seated, gesturing with hands
Russian President Vladimir Putin delivers an address to the participants of the Bolshaya Peremena All-Russian contest for school students via a video link at the Novo-Ogaryovo state residence, outside Moscow, on June 1. (Mikhail Metzel/Getty Images)

By    |   Monday, 13 June 2022 09:46 AM EDT

Russia's economy is headed for a decline in which citizens will become poorer and struggle to pay for products and services, one Moscow economist said.

Sanctions imposed on Russia — and countersanctions following President Vladimir Putin's unprovoked attack on Ukraine — will cause the economic downturn.

"We do not expect large numbers of unemployment, but at the same time we have no doubt that the blow to labor income will be serious," Vladimir Gimpelson, director of the Center for Labor Studies at the Higher School of Economics, told Kommersant.

"The specificity of this crisis is that it promises to become protracted, since no one is going to remove sanctions or countersanctions in the foreseeable future."

With sanctions expected to be in place for a long time, Gimpelson said the Russian population's income will stagnate, causing people to become poorer.

An Avito.Rabota and GigAnt study released June 7 said 46% of Russians already got part-time work to supplement their regular income, Gazeta reported.

Press secretary Dmitry Peskov said the Russian economy remained a high priority for Putin.

"Of course, the main thing for our president is the development of Russia and the improvement of the living standards of our citizens," Peskov told Tass, SM News reported. "This has always been, is, and remains the main thing for our president."

Putin last week said that no Iron Curtain would fall over the Russian economy despite the sanctions imposed by the West because Moscow would not close itself off from the world like the Soviet Union did.

The sanctions imposed on the West over Russia's invasion of Ukraine have tipped Russia, one of the world's biggest producers of natural resources, toward the biggest economic contraction since the years following the 1991 fall of the Soviet Union.

Putin told government officials last week that national unemployment was at the "lowest historical level in Russia in April and May" and "inflation is zero now," Business Insider reported.

However, one foreign affairs analyst said it was possible Putin’s statistics had been manipulated.

"The Russian government obviously has an incentive to try to hide the economic impact of Western sanctions," Andrew Lohsen, a fellow in the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies, told Insider.

"So if there was a way to creatively account for joblessness and try to hide the true impact of unemployment, then I think that's something that the Russian government will absolutely resort to. It makes perfect sense."

Reuters contributed to this story.

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Russia's economy is headed for a decline in which citizens will become poorer and struggle to pay for products and services, one Moscow economist said.
russian economy, decline, prediction, sanctions, vladimir putin
Monday, 13 June 2022 09:46 AM
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