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Russia is rapidly getting poorer – what awaits the Russian economy

Experts note that the demand of Russians for non-food products has decreased by 17%, this is a vivid example of the fact that people began to save on everything except food.

The Russians will rapidly become poorer, experts say / photo REUTERS

Negative economic growth, damage from EU sanctions – as soon as the Kremlin does not try to explain in the Kremlin the real situation with the Russian economy. The figures show reality: according to economists, after the start of a full-scale war with Ukraine, the inhabitants of the Russian Federation began to become poorer.

Experts spoke about the sad situation with the Russian economy on the air of the FreeDom marathon.

“There are real figures published by Rosstat for the first quarter of 2022. This indicator of the number of the poor in the Russian Federation has increased from 12.7 million to 20.9 million, that is, by 69%. The number of unemployed is also increasing. Since it all started in March, it has not yet been included in the statistics of the first quarter. We will see these statistics based on the results of the second quarter,” explains Ilya Neskhodovsky, director of the Institute for Socio-Economic Transformation.

Experts note that the demand of Russians for non-food products has decreased by 17%, this is a vivid example of the fact that people began to save on everything except food. And by the end of August, economists predict another crisis in the labor market.

“That’s when there will be mass shutdowns of processing enterprises, people will either be fired or transferred to low-paid jobs. Or people will leave. Since the beginning of the war, 4 million citizens have left the Russian Federation,” Neskhodovsky said.

Those who cannot leave will have to get used to the new reality. But, as the well-known banker Sergei Fursa emphasizes, the Russian economy will fall, people will live worse, but this does not mean the collapse of the country.

Moscow is already thinking about transferring the management of the national currency rate to manual mode.

As noted by Sergei Zhavoronkov, Russian economist and senior expert at the Institute for Economic Policy. Gaidar, Putin is trying to keep foreign investors in the Russian Federation and offer options to sell shares with a buyback in the future.

“There is such a paradoxical moment that before the start of the war, everyone thought that the Russian economy could have serious problems, but the Russian army is powerful and invincible. But it turned out the other way around,” Zhavoronkov said.

According to him, in the Russian Federation there are 13 million in the National Wealth Fund, this will be enough for 2-3 years at the current level of ruble budget expenditures. Another thing is that these costs will be reduced, because oil export revenues are falling. In May, budget oil and gas revenues almost halved, in April they reached almost 900 billion rubles, and in May they halved. The Russian economist said that the main problem of the Russian economy is not unemployment, because there is a “gray” labor market.

“A couple of million (of the unemployed – UNIAN) may be added. But the main problem is the drop in income of those who continue to work,” Zhavoronkov stressed.

According to him, the prices of many consumer goods, and not only imported ones, have risen sharply. Journalists cited media figures based on Rosstat data:

What can Russians now afford to buy?

Journalists noted that if the financial situation in the Russian Federation worsens, it will push the inhabitants of the poorest regions of Russia to go to war against Ukraine in order to earn money.

In addition, the Russian economist commented on the situation around the national currency of the Russian Federation.

“The real exchange rate of the ruble differs from what the Central Bank publishes by about 10 rubles, that is, by 20%. That is, the Russian authorities keep two rates: one official – at which you cannot buy, the second – the real one, which is now in the region 70 rubles,” summed up Zhavoronkov.

Recall that on February 24, 2022, the Russian Federation unleashed a full-scale war against Ukraine. As of June 22 Russia lost in our country 34 thousand 230 soldiers.

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