Though COVID-19 rocked the global economy last year – and oil demand with it – Putin could publicly claim a win at his end of year marathon press conference: GDP had only fallen by 3.6%, beating most of the world’s major economies, thus laying a solid foundation for recovery. But it turned out he undersold the Kremlin’s “success” – as of February 1, data showed GDP only contracted by 3.1%. While ‘the economy’ writ large beat expectations, Rosstat estimated that real incomes fell by 3.5%, the population below the poverty line increased by 400,000, and 2020 marked the 8th consecutive year of real income decline. They remain 10% below 2013 levels. What’s worse, the year ended with a surge of inflation for basic consumer goods like pasta, bread, and sugar due to a global rise in commodity prices as well as a growing problem with inflation for housing prices.
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