Putin promised Russians rapid economic and income growth. But what really?

Vladimir Putin, during a direct line on Thursday, promised that the Russian economy in 2023 will grow by 3.5% , and real wages by 8% . Economists believe that growth will be lower even this year, and in 2024-2026 it will fall significantly. Experts do not share Putin’s confidence that the Russian economy has a sufficient margin of safety.

Details . According to Putin's forecast, GDP growth this year will be 3.5%, and real wages (nominal wages minus inflation) will grow by 8%.

• In fact. Economists from 31 banks and think tanks surveyed by the Central Bank in December gave lower numbers: their average forecast for GDP growth in 2023 is 3.1% , and real wages – 6.6%.
• Russia's economy would have been 5% larger if Vladimir Putin had not started the war in Ukraine, US Treasury chief sanctions economist Rachel Lingas said in a draft review of the war's financial impact on Moscow, seen by the Financial Times. Finance Ministry analysts say Putin's official GDP growth figures may not reflect reality because the figures are driven in part by the military-industrial complex. It only absorbs economic resources without creating positive effects for other sectors of the economy.
• The president also kept silent about the fact that, according to the same Central Bank macro survey , such growth will no longer happen in the medium term. In 2024, real wage growth will collapse to 1.8% and will not exceed 2% until 2026. These same economists expect that GDP growth in 2024 will slow down to 1.3% , and then for another two years it will not exceed 1.5% - but the head of state did not name these forecasts at the press conference either.
• this week that the data on Russian economic growth hides an alarming reality wrote The Economist magazine also . According to the publication, the Russian economy is overheated and may not withstand the growth rates announced by the Russian authorities.

What else did the president promise? Putin estimated the growth of real incomes of the population in 2023 at “somewhere at five percent.”

• In fact , his own officials are less optimistic: the Ministry of Economic Development estimates the growth of this indicator at 4.3% , but already in 2024-2026 the dynamics of real income will halve, to 2.6-2.7% .
• The increase in citizens' incomes is mainly due to social benefits related to the war and high salaries in the defense industry, experts from the US Treasury point out.