During the duration of President Vladimir Putin’s nearly 24-year tenure at the head of Russian politics, Russians have experienced a remarkable rise in living conditions. Putin declared on Friday that he would seek the presidency once more.

Millions of Russians had higher wages and more purchasing power as the nation emerged from the turbulent 1990s thanks to high oil prices, which are the nation’s principal export.

However, the Kremlin’s calculations have shifted as a result of the 2008 financial crisis, many rounds of Western sanctions that ensued after Moscow annexed Crimea in 2014, and restrictions that followed its full-scale invasion of Ukraine.

In recent years, as the economy transitioned from a period of steady growth to one of stagnation, Russian authorities have had to contend with the depreciation of the rouble and frequently high inflation.

These graphs illustrate the economic narrative of Putin’s presidency.

Early in Putin’s administration, the rouble was supported by strong commodity prices and traded rather steadily. However, once sanctions were imposed due to Russia’s annexation of Crimea, which Ukraine demands be returned, the currency began to weaken and become more volatile.

In the weeks following Moscow’s invasion of Ukraine in February 2022, it hit a record low, and the government then imposed currency restrictions to stop capital flight.

Russians are accustomed to swings in the value of the ruble, and the overall downward trend over the past ten years in particular.

During the first several years, real incomes also increased substantially, but since the start of the sanctions era, wage growth has been more stagnant. Interest rates and inflation have frequently been high, as Russia’s central bank has used monetary policy to attempt and restrain price increases.

Russia’s budget spending priorities have also changed over the past ten years, with an increasing emphasis on defence spending that will result in the military receiving over a third of all budgetary expenditures by 2024.

In real terms, spending on other sectors like healthcare and education has hardly increased in the past ten years.

(Adapted from Reuters.com)

Categories: Economy & Finance, Geopolitics, Strategy, Uncategorized