State of the Russian economy examined

“Russia is spreading propaganda in an attempt to portray its economy as strong and resilient in order to give the impression that sanctions are ineffective and thereby undermine continuance of support to Ukraine. That’s why it’s important to nuance the view of the Russian economy and look beyond the official figures,” said Ms Svantesson. 

The seminar was attended by Director of the Stockholm Institute of Transition Economics (SITE) Torbjörn Becker at the Stockholm School of Economics, who presented SITE’s report, done in response to the Government’s assignment to the National Institute of Economic Research. The report calls attention to one of the main challenges in analysing the Russian economy: the lack of reliable data because Russia’s economic reporting has become intertwined with its war propaganda. The Russian government has stopped publishing large parts of previously available data, and the figures that are available are being used to portray a more positive situation.

The report also highlights that the Russian government’s financial reserves, which have been used to finance war spending, are rapidly running out and may be exhausted within a year. Once these reserves are exhausted, the Russian Central Bank will then be under pressure to lower its policy rate or even to start printing more money, which could lead to high inflation and a weakened rouble.

“It is clear that the Russian economy is not working as well as Putin would have it appear. Resources are being drained to the war industry and the economy is overheated. There are obviously big question marks surrounding the official figures. We must continue to actively combat Putin’s propaganda. Wednesday’s discussion is an important part of these efforts,” said Ms Svantesson.

Russian opposition politician and economist Vladimir Milov and analyst and economist Emil Wannheden at the Swedish Defence Research Institute also attended the seminar.