On June 16, 2021, Russian President Vladimir Putin met with US President Joe Biden at the La Grange Villa in Geneva, Switzerland.
Sputnik | via Reuters
Love him or hate him, there is no doubt that Russian President Vladimir Putin helped Russia stay firmly on the global geopolitical stage during his tenure.
Since the end of 1999, Putin has served as the prime minister and president of Russia and has been a puppet of the Russian economy, seeking to attract foreign direct investment, promote the development of various industries, and develop Russia’s natural resources, especially the country’s rich oil and natural gas.
Of course, it was not all smooth sailing. Russia has been hit by its own economic misfortunes-such as imposing international sanctions on key sectors after the annexation of Crimea from Ukraine in 2014 and intervening in the 2016 US election-and some things it cannot control, such as the 2008 financial crisis , The oil price plunge in 2014 and the recent Covid-19 pandemic.
More than 20 years after Putin came to power, Russia — a country that spans Europe and Asia and has approximately 144 million inhabitants — faces a challenge that the Kremlin must resolve as quickly as possible.
These issues include more pressing living standards and the specter of inflation that may hit Russian consumers in a fragile period, as well as longer-term issues such as Russia’s transition from an energy-dependent export-oriented economy.
On November 6, 2020, tourists walk along the Red Square in front of St. Basil’s Cathedral in Moscow.
Alexander Nemenov | AFP | Getty Images
CNBC checked the economic data provided by the Organization for Economic Cooperation and Development, which spanned Putin’s 20 years in power, looked at the country’s growth rate, per capita GDP, employment and inflation, as well as households and EU neighbors, more extensively. Disposable income of the OECD (including 38 countries from all over the world) compared to the United States
Russian economic growth
There is no doubt that the Russian economy has grown under Putin’s leadership, although after the 2008 financial crisis, it has experienced a deeper economic decline than other countries, as shown in the figure.
The recession that Russia entered after the 2014-2016 oil price plummet (the oil price fell from around 114 US dollars per barrel to 25 US dollars in early 2016) is also obvious, and the damage to GDP caused by the pandemic is also obvious. Russia is no longer protected from blockade. There are more impacts, industry shutdowns and declines in oil demand than in other parts of the world. Having said that, its decline is not as pronounced as seen by the European Union or the OECD.
The icebreaker Tor (right) in the port of Sabetta on the Kara Sea coastline of the Yamal Peninsula in the Arctic Circle, about 2,450 kilometers away from Moscow.
Kirill Kudryavtev | AFP | Getty Images
The chart below shows Russia’s GDP per capita, which is a core indicator of economic performance and is often used as a broad measure of average living standards or economic well-being.
Rising consumer prices have always been a common problem in the Russian economy. In recent years, inflation has been the focus of the Central Bank of Russia. Especially after the oil crash, the exchange rate of the Russian ruble against the US dollar plummeted, increasing inflationary pressures.
The current inflation rate in Russia is 7.4%, a figure that prompted the central bank to raise interest rates by 25 basis points to 6.75% in September. The bank’s inflation target is 4%.
The central bank pointed out last month that although the Russian economy is “returning to a balanced growth path…but the contribution of persistent factors to inflation is still considerable”. The bank said that in this environment, the balance of inflation risks tends to rise.
On October 6, 2021, Moscow, Russia, a hairdresser wearing a protective mask and gloves styling a client’s hair.
Mikhail Svetlov | Getty Images News | Getty Images
Household disposable income was severely affected by rampant inflation during the 2014-2016 oil crisis. However, the latest data shows that Russia has recovered in this indicator. The annual growth rate of household disposable income in 2019 has remained at the same level as that of the United States. resemblance
Russia has performed well in terms of employment indicators. In fact, it is far better than its counterparts in the EU and OECD. Its employment rate is higher than the average level of OECD countries, and its unemployment rate is lower than the OECD average.
The OECD stated in a 2018 report: “Flexible labor market legislation, weak unemployment insurance and continued economic recovery have reduced the unemployment rate.” However, Russia scores relatively low on work quality indicators and income The quality is close to the bottom of OECD countries.
Employees at the Mikron plant in Russia make microchips for electronic passports.
Alexander Ryumin | TASS | Getty Images
Compared with OECD countries, it is also lower than the OECD average in terms of the main indicators of inclusiveness, and the employment gap for disadvantaged groups is greater, such as mothers with children, young or older workers, workers with disabilities or Non-Russian workers.
— CNBC’s Hadley Gamble hosted a panel discussion with Russian President Vladimir Putin and the CEOs of BP, Total Energies, Exxon Mobil and Daimler during Russian Energy Week. It will be broadcast live on Wednesday, October 13th at 1pm Moscow time/11am London time.