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Russia’s economy under President Putin in charts

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Russian President Vladimir Putin attended a meeting at Villa La Grange, Geneva, Switzerland on June 16, 2021 with U.S. President Joe Biden.

SPUTNIK via REUTERS| via REUTERS

He’s a man you can love or hate, but there is no doubt about that Russian President Vladimir PutinHis efforts in keeping Russia on the international geopolitical scene during his tenure have been crucial.

Putin, who has served as the Russian president since 1999 and was the prime minister, alternately, is the head of Russia’s economic strategy. His goal is to encourage foreign direct investments, increase a range of industries, and exploit Russia’s vast natural resources.

It hasn’t been easy. Russia has been hit by economic misfortunes both of its own making —such as international sanctions placed on key sectors after its 2014 annexation of Crimea from Ukraine and its meddling in the 2016 U.S. election — and some it had no control over, such as the 2008 financial crash, 2014 oil price crash and most recently, the Covid-19 pandemic.

More than 20 years after Putin came to prominence, Russia — a country which spans Europe to Asia and has around 144 million inhabitants — is facing challenges that the Kremlin will have to tackle soon enough.

The most pressing issues are the matter of living standards as well as the fear of inflation hitting Russian consumers during times of vulnerability. Long-term problems include Russia’s move away from energy-dependent and export-oriented economies.

Tourists stroll along the Red Square, in front of St. Moscow Basil Cathedral on November 6, 2020

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CNBC has taken a look at economic data from the Organisation for Economic Co-operation and Development that spans the two decades that Putin has been in power, looking at the country’s growth rate, GDP per capita, employment picture and inflation story as well as household disposable income compared to its neighbors in the EU, the wider OECD (which includes 38 countries from around the world) and the U.S.

Russia’s economic growth

While Russia’s economy is certain to have grown under Putin (as this graph indicates), it has taken a greater dive after the 2008 financial crisis.

Russia fell into recession after its oil price crash in 2014-2016, when oil prices plunged from about $114/barrel to around $25/barrel. This is alongside the damage to the GDP caused by the pandemic. Russia has not been more vulnerable to oil industry closures, lockdowns or slumping oil demand than any other country. Its decline is not as severe as the one seen in the EU and OECD.

The Tor Icebreaker, right at the port in Sabetta on the Kara Sea shoreline in the Yamal Peninsula (Arctic circle), approximately 2450 km from Moscow.

AFP | AFP | Getty Images

Below is the Russia GDP per capita graph. This indicator of economic performance can be used in a wide range of ways.

Inflation

Russia has had rising consumer prices as a constant problem in its economy. Inflation was a major focus point of Russia’s central banks in recent years. Its rise in inflation came in response to the crash in oil, which saw the Russian ruble fall in value against US dollars, increasing inflationary pressures.

Russia’s current inflation rate is 7.4%. This figure prompted Russia’s central bank to raise interest rates 25 basis points to 6.755% in September. Inflation target for the bank is at 4%

The central bank noted last month that while Russia’s economy is “returning to a balanced growth path … the contribution of persistent factors to inflation remains considerable.” In this environment, the balance of risks for inflation is tilted to the upside, the bank said.

Moscow, Russia – October 6th 2021 – A hairdresser styles the hair of clients wearing a mask and gloves.

Getty Images News – Getty Images| Getty Images News | Getty Images

It was hard for households to make ends meet during the period of high inflation that followed the 2014-2016 Oil Crisis. But the latest data indicates that Russia has now recovered. The annual rate of household income growth in 2019 is very comparable to the U.S.

Employment

Russia is a strong performer in employment indicators. In fact, Russia does better than peers in EU and OECD. Russia’s employment rate is higher than the average of OECD countries and its unemployment rate lower than the OECD.

The OECD released a report in 2018 stating that “flexible labour market legislation and weak unemployment insurance reduce unemployment.” Russia ranks low in job quality and has earnings that are close to those of other OECD members.

Workers at Russia’s Mikron Plant make microchips that can be used to create electronic passports.

Alexander Ryumin | TASS | Getty Images

The OECD standard for inclusiveness is also lower than the country’s. It has a higher employment gap for disadvantaged workers (e.g., mothers with children or workers with disabilities) than the OECD.

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