Its report, titled Impact Of Sanctions On The Russian Economy, states that real wages in the Russian Federation fell by 6.1%, while in April the decline was even worse -7.2%. The recorded decline in real income was at its highest level in seven years. The report adds: “Russians became more impoverished only in 2015, after the annexation of Crimea and the first Western sanctions and the fall in the price of oil, which caused the ruble to collapse and inflation to rise.” Ms Shapoval told Express.co.uk: “The real wage just falls as prices rise. “But other factors include the departure of foreign companies resulting in fewer working hours and a lower average wage. a significant reduction in production in some indicators (car, transport, etc.);
Russian President Vladimir Putin, whose country is under severe economic pressure (Image: GETTY)
Shoppers queue outside H&M stores in Moscow as the company pulls out of Russia (Image: GETTY) However, some industries also reduced average wages – for example, the production of furniture, electronic equipment, etc. He added: “We are also seeing an increase in competition for vacancies on job search sites. “More than 492,000 people (estimated based on a sample of employees working in international companies) are likely to work fewer hours.” Russians were already feeling the decline in their quality of life, though not necessarily the impact of falling real wages. READ MORE: Russia’s economy in meltdown as vital industry and imports crippled
A protester is arrested by police during an anti-war demonstration in St Petersburg (Image: Reuters) He said: “This is because there is a shortage of imported quality Western products. “These products are being replaced by either lower quality local products or Chinese products – which are cheaper as they are lower quality.” As things stand, despite sporadic anti-war demonstrations, Ms. Shapoval was skeptical of widespread protests in the face of worsening economic conditions. He said: “It is unlikely – given the current polls with almost unanimous support for Putin and the war – that there will be an upsurge in civil unrest. DON’T MISS LIVE Brexit: ‘No clear impact’ UK GDP on par with EU countries [LIVE BLOG]Putin’s allies are LOSING IT from footage of life returning to normal [VIDEO]Jacob Rees-Mogg launches a blistering attack on Rishi Sunak [INTERVIEW]
Vladimir Putin ordered his invasion of Ukraine on February 24 (Image: GETTY)
Volodymyr Zelensky, President of Ukraine (Image: GETTY) “At least before the number of dead soldiers rises too high and Putin tries to force a military mobilization in areas closer to Moscow.” Ms. Shapoval’s gloomy forecast was confirmed by preliminary data from Russia’s federal statistics agency Rosstat on Friday, which showed the country’s economy shrank 4.0 percent year-on-year in the second quarter of 2022. The economy has been plunged into recession since Moscow sent its armed forces into Ukraine on February 24, triggering sweeping Western restrictions on its energy and financial sectors, including a freeze on Russian reserves held abroad, prompting many Western companies to exit the market . Rosstat did not elaborate, but analysts said the contraction was caused by weak consumer demand and the effects of sanctions.
Ukraine’s territorial disputes mapped (Image: Express) Sergey Konygin, economist at Sinara Investment Bank, said: “The June data suggest that the contraction in the Russian economy appears to have bottomed out as the situation in some sectors stabilizes.” However, the contraction in gross domestic product in the second quarter was not as deep as expected, with analysts on average forecasting GDP to contract 7 percent year-on-year in April-June after expanding 3.5 percent the first trimester. Central bank analysts had expected GDP to contract by 4.3% in the second quarter, saying it was on track for a 7% drop in the third quarter. The central bank predicts that the economy will start to recover in the second half of 2023. Given the highly volatile political environment, official forecasts of the depth of Russia’s recession vary.
Vladimir Putin Intelligence Archive (Image: Express) The economy ministry said in April that gross domestic product could shrink by more than 12 percent this year – after growth of 4.7 percent in 2021 – in what would be the biggest contraction since the mid-1990s. But forecasts have since softened as Russia pushes back against restrictions. The central bank forecast in April that GDP would contract by eight to ten percent, but last month revised that to forecast a contraction of four to six percent. Central Bank Vice President Alexei Zabotkin commented: “GDP contraction will bottom out in the first half of 2023. The economy will move towards a new long-term equilibrium.”
