What does this Kremlin bank account look like?
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Milan, Italy – The editor of one of Russia’s most respected independent economic magazines grudgingly acknowledges that Putin is riding the sanctions storm well.
“We have some numbers for the first half of 2022, and the overall sentiment is more upbeat than it was in March or April,” Peter Mironenko of The Bell told Fox News.
“We see the numbers. They are not manipulated. On the one hand, we see an economic slowdown in the second quarter. GDP is down about 4% and in the third quarter we will have about 7%. This is a recession. But the scale is much more modest than what was said three or four ago Months “.
and less dramatic than in 2009 when war was not being waged; It’s also lower than the Russian Central Bank’s initial prediction of an 8-10% GDP drop this year. And there’s more. Family income decreased by only 0.8%, according to Mironenko. Right now, there is a downturn. Some people have simply been freaked out by the political situation and pushed to spend less, and save for a rainier day.
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There’s little foreign to buy, so some Russians are writing off that, but in fact, imported items can still be bought — between brokers and a surprisingly strong ruble, Mironenko says an iPhone will cost you pretty much the same as a year ago. He himself was shocked when he found out the fact that he had recently bought one for his father.
He says the government has wisely avoided setting prices even if it feels like everything it’s doing feels like going back to the Soviet Union. Unemployment has reached an all-time low. Some of this is artificial. The government has increased pensions and salaries since the war began because it can.
“The sanctions have not reduced the Russian budget’s income from oil exports, so the government has money,” said Mironenko, who recently went into exile due to enormous pressure on the press.
“He will (get money) in 2022 and 2023, and as we know, the government of Vladimir Putin has historically been very good and very cautious about people’s personal income. The whole myth of prosperity” is based on the continuous increase in people’s personal income. . Since 2000, it has been closely associated with the rise in oil prices.”
But in any case, adds Mironenko, Putin will have to preserve this prosperity project, and as long as Moscow has the money, it will spend it on keeping the Russians at bay.
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How long will that take, I ask Mironenko? He already acknowledges that sanctions do work, in theory, but says, “It’s a long process. Historically there aren’t many examples when even the most severe sanctions have done their job in a year. I don’t think we’ll see any effects – policy changes three to five years ago.”
According to Mironenko, the energy dance is a difficult one, as he explained that oil is more important than gas to Russia’s coffers, so in some ways it is a commodity to play with.
Vladimir Putin has started the game of reducing the flow of gas to Europe, presumably to see if it makes Brussels nervous enough to ease sanctions. The pain is apparently worth bearing for now. But when the European embargo on Russian oil begins at the end of the year, there may be a real escalation of the crisis in Russia and Mironenko will be watching that moment closely.
Meanwhile, when it comes to public opinion, it’s not just Russia’s propaganda crowd that blames the West for any problems they’re facing even if the economy at the moment is apparently – albeit perhaps artificially strong. It’s hard to have a life connected to the outside world and for many educated and democratic-minded Russians it’s vital.
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Mironenko says there is a great deal of anger rising among those who feel cut off from the West and also a lot of debate about how and where one should live one’s life from a moral perspective. So while the economy may be quite capable of fulfilling at the moment, soul-searching and anxiety are dragging many Russians down.