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Milan, Italy – The editor of one of Russia’s most respected independent business journals reluctantly admits that Team Putin is weathering the storm of sanctions well.
“We’ve released numbers for the first half of 2022, and the overall sentiment is much more optimistic 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 economic downturn in the second trimester. GDP fell about 4% and in the third quarter we will have about 7%. It’s the recession. But the scale is much more modest than it was said three or four months ago.”
And less dramatic than in 2009, when the war was not raging; it is also less than the Central Bank of Russia’s initial forecast of an 8-10% drop in GDP this year. And there’s more. household income is down just 0.8%, according to Mironenko. At the moment, there is even deflation. Some people have simply been scared off by the political situation into spending less, saving for an even rainier day.
There are fewer foreign things to buy, so some Russians overlook this, but in fact imported items can still be bought – between brokers and the surprisingly strong rouble, Mironenko says an iPhone will cost you about the same price than a year ago. He himself was shocked to find out the fact when he recently bought one for his father.
The government, he says, has wisely avoided price controls, even though everything else feels like the USSR. Unemployment is at a historic low. Some of this is artificial. The government has raised pensions and wages since the war began, because it can.
“The sanctions did not decrease the income of the Russian budget by oil exportsso the government has money,” said Mironenko, who recently went into exile due to immense pressure on the press.
“He (will have money) in 2022 and in 2023, and as we know, historically Vladimir Putin’s government was also very good, very careful about people’s personal income. His whole ‘prosperity legend’ is based on the constant increase in people’s personal income. . Since 2000, it was very much linked to the increase in oil prices.”
But either way, adds Mironenko, Putin must maintain this prosperity project, and as long as Moscow has the funds, he will spend them to keep Russians in the dark.
How long will this last, I ask Mironenko? He admits sanctions work, in theory, but he says: “It’s a long process. Historically, there aren’t many examples where even the heaviest sanctions do their job in a year. I don’t don’t think we’ll see any effects – policy changes for three to five years.”
The energy dance is tricky, according to Mironenko who explains that oil is more important than gas to Russia’s coffers, so somewhat of a commodity to play with.
Vladimir Poutine started a game of decreasing the flow of gas to Europe supposedly to see if that would make Brussels nervous enough to ease the sanctions. The pain, apparently worth bearing for now. But when the European ban on Russian oil begins at the end of the year, there could be a real outbreak of distress in Russia and Mironenko will be watching this moment closely.
Meanwhile, when it comes to public opinion, it’s not just the propaganda-soaked mob in Russia who blame the West for all the woes they are experiencing, even if the economy is for the moment apparently – if perhaps artificially strong. It is more difficult to have a life connected to the outside world and for many educated and democratic Russians, it is vital.
Mironenko says there is a lot of anger among those who feel left out of the West and also a lot of debate about how and where one should, from a moral standpoint, live one’s life. So while the economy may be fairly solvent at the moment, soul-searching and angst are dragging many Russians down.