DISINFO: Russian economy grows despite sanctions
SUMMARY
The Russian statistics agency published the economic statistics for 2022, and according to the data, the country's gross domestic product has increased significantly. Even experts are surprised by the stability of the Russian economy.
According to the final data on the GDP decline in 2022 and the Ministry of Economic Development's preliminary estimate of economic growth in 2023, the economy has now not only fully recovered from the recession in 2022, but also exceeded the pre-recession level of 2021 by almost 2.3 per cent, according to RBK.
RESPONSE
Recurring pro-Kremlin disinformation narrative about Russia’s economic resilience and a looming economic collapse of its adversaries due to sanctions.
Despite the fact that many economists believe Russia's economic data lacks transparency and reliability, with some suggesting that statistics are distorted and falsified, Russia's seemingly positive macroeconomic figures are largely a result of its shift to a war-type economy, and not the result of the sanctions.
This transition is primarily focused on the focus on industrial production of military equipment for the invasion of Ukraine (much of which is later destroyed or consumed on the battlefield), leading to the neglect of other economic sectors. Foreign Direct Investment has dropped to insignificance.
According to the data analysed by Bank of Finland Institute for Emerging Economies, the reliance of Russia’s recovery on war-related branches makes it increasingly difficult for Russia to maintain its current GDP growth rate. Constant increases in public spending are unsustainable and the military industry is already reported to encounter capacity constraints. The current focus on military production has diverted resources from Russia’s civilian industries, making it more difficult to rely on branches that typically form the backbone of advanced economies to provide long-term growth. Moreover, Russian military spending is very high - only for one massive missile attack on Ukraine on 2 January, 2024 Russia spent about $620 million.
Concurrently, the ruble has undergone significant depreciation, ending 2023 as one of the three weakest currencies among developing countries tracked by Bloomberg. Inflation is soaring, and there are signs of economic overheating. Consequently, an increasing number of Russian citizens are feeling the financial strain of the war in their everyday lives.
Read similar disinformation narratives claiming that Russia’s economy is massively outperforming that of the collective West, that Europe’s fall continues and poverty is knocking at the door and that sanctions that were supposed to destroy Russia may disintegrate the EU.