Journalists say that while President Vladimir Putin continues to praise the Russian economy, the sanctions restrictions imposed on the war against Ukraine are rapidly worsening the situation in the Russian Federation.
The economic situation in Russia continues to deteriorate and the Russians are starting to lose the wealth they have accumulated over the years. As Kremlin chief Vladimir Putin continues to insist that the country’s economy has exceeded all expectations, the numbers show otherwise.
It is reported that especially the economic sanctions and the high costs of the war against Ukraine have already caused a historic budget deficit in the Russian Federation. In addition, the country is already experiencing labor shortages in the labor market, and revenues from the sale of energy resources continue to fall due to price restrictions and embargoes.
Thus, retail sales, an indicator of real income, decreased by 6.77% in 2022. The annual decline in December was already 10.5%.
Unemployment in Russia has so far remained at 3.7%. Journalists attribute this to a large staff outflow (many Russians went abroad after mobilization in September 2022) and the enlistment of hundreds of thousands of young Russians who went to war in Ukraine.
A drastic decline in oil and gas revenues on the backdrop of increased war spending led to a record deficit in the state budget of the Russian Federation in 2023. Also, Reuters writes that Russia’s gold and foreign exchange reserves are declining rapidly. At the same time, although economists agree that in 2022 the Russian economy is more or less stable, despite its gradual depletion against the background of the largest sanctions in history.
Recall that the state budget deficit in Russia in January 2023 is fixed at 1.76 trillion rubles, or almost 25 billion dollars, at the same time, Russia’s 2023 federal budget includes a deficit of 2.9 trillion rubles. In other words, a significant part of the deficit occurred in the first month of 2023.
We also note that at the beginning of December 2022, British intelligence reported that the Russian leader Vladimir Putin is ready to spend about a third of the state budget on the war against Ukraine in 2023. As the ministry suggested, the economic pressure of taxes on the war will be felt by every resident of Russia.
Focus he also wrote that in September 2022 Russia calculated the financial losses due to the war in Ukraine. After a new attack on Ukraine, Russia was forced to look for new markets for its oil, as many EU countries supporting our country refused to buy “black gold” from the aggressor and finance the war.
Source: Focus
John Holton is a seasoned author and journalist, known for his expertise in economics. He currently works as a writer at 24 news breaker, where he provides readers with in-depth analysis and commentary on the latest economic developments. With a background in finance and a talent for explaining complex economic concepts in a clear and accessible way, John’s writing is a must-read for anyone interested in staying informed about the economy.