Russia’s economy is in crisis despite higher oil prices driven by the war in the Middle East. Moscow is distorting statistical data, including inflation indicators, Financial Times reports, citing a Swedish intelligence report.
Crisis in the Russian economy. According to the article, even official Russian data point to a crisis. For example, Vladimir Putin said that Russia’s GDP fell by 1.8% in January and February. The decline affected industry and construction, key sectors for a country waging war.
Manipulation of statistics. At the same time, Russia is systematically manipulating statistics to convince Ukraine’s allies that the Russian economy has withstood enormous military spending and sanctions pressure.
The real scale of the crisis. In reality, the Russian economy is in even worse shape than official statistics indicate, Tomas Nilsson, head of Sweden’s Military Intelligence and Security Service, told reporters.
According to him, to cover its budget deficit, Russia needs Urals oil prices to remain above $100 per barrel for a year. To solve other financial problems, the head of the Swedish agency added, fuel prices would need to stay high for much longer.
The Central Bank of Russia is understating inflation figures, Nilsson said. In his view, real inflation in Russia is closer to the 15% key interest rate than to the official 5.86% figure.
What may be wrong with the Swedish assessment of inflation in Russia. The Swedish intelligence assessment of inflation in Russia may be mistaken. When calculating this indicator, Rosstat uses a basket of thousands of goods and services across different regions and retail outlets, while also adjusting for the structure of consumption.
Economists interviewed by «Novaya-Europe» believe that the basket used by Rosstat reflects an average consumption structure. To understand what the Swedish intelligence estimate is based on, it is necessary to know their methodology: which basket they used and what distribution was applied.
There is also the concept of “inflation for the poor,” since food and essential goods for low-income people rise in price faster than other goods. Read about how rising prices primarily affect customers of low-price stores in the article by «Novaya Gazeta Europe» .