Russia under Putin: Quality of life tripled, debt down 75%

President Vladimir Putin. Photo: Reuters

Quality of life

Before President Putin was elected in 2000, Russia had a GDP per capita of $9,899 in Purchasing Power Parity (PPP). This figure nearly tripled in 2017 and is now $27,900. Russia also has the highest GDP per capita among the BRICS (Brazil, Russia, India, China and South Africa), surpassing China in second place at $16,624. PPP is considered an indicator of the relative cost of living as well as the inflation rate to compare living standards in different countries.

Meanwhile, the average nominal monthly wage in Russia increased almost 11-fold, from $61 to $652. Unemployment fell from 13% to just 5.2%. Pensions increased more than 1,000% in the same period, from $20 to $221.

Economic health

Russia's economy is currently the 6th largest in the world by PPP, with a GDP of around $4 trillion. Auditing firm PwC predicts that by 2050, Russia will become the number 1 economy in Europe, surpassing Germany and the UK.

In 1999, the Russian economy, measured by PPP, was only $620 billion. Over the 18 years of Putin's presidency and prime ministership, the Russian economy has grown by 600%.

Inflation in Russia fell from 36.5% to 2.5% by the end of 2017. The total value of assets in the Russian banking system increased 24-fold to $1.43 trillion. The capitalization of the Russian stock market increased more than 15-fold to $621 billion.

Public debt and foreign exchange reserves

When President Putin took office for his first term, Russia had only $12 billion in foreign exchange reserves and high public debt, equivalent to 92.1% of the country's economic output.

However, the numbers have changed dramatically over the past 18 years, with Russia’s public debt now down to just 17.4% of GDP and foreign exchange reserves rising to $356 billion. Low public debt and rising foreign exchange reserves helped Russia weather the 2008 economic crisis and the 2014-2016 recession caused by falling oil prices and Western sanctions.

Russia’s gold reserves have increased by more than 500% since 2000. The Central Bank of Russia (CBR) added 9.3 tonnes of gold to its reserves in December 2017, bringing its annual gold holdings to a record 1,838.211 tonnes, worth more than $76 billion. According to the World Gold Council, Russia is not only the world’s largest buyer of gold, but also the world’s third-largest producer.

Agriculture

Although oil and gas revenues still dominate the Russian economy, Russian agriculture has also boomed in recent years. In the 2017 harvest, Russian farmers achieved an unprecedented harvest, breaking a 40-year Soviet record by harvesting more than 130 million tons.

In 2016, Russia became the world's largest wheat exporter. Since the early 2000s, Russia's share of the global wheat market has quadrupled, from 4 to 16%.

Although still behind the energy sector, agriculture has overtaken arms sales to become Russia’s second-largest export sector. Russia began exporting grain in 2002 and sold more than 7 million tons. By 2017, Russia exported 45 million tons of grain, an increase of more than 600%.

According to the results of a survey released by the Russian government's VTSIOM research center on January 15, about 67% of Russians are expected to vote in the presidential election on March 18. The survey also showed that 81.1% of respondents said they supported President Vladimir Putin, who is running as an independent candidate. This rate puts Mr. Putin far ahead of the remaining opponents, who are predicted to have support rates that do not exceed double digits, in the race to the Kremlin.