The cost of war: Inside Russia's economic unease
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What is the current state of fuel shortages and long queues at Russian gas stations?
Hi there, I'm Ed Butler. Welcome to Business Daily from the BBC. Today we're asking what is going on inside the Russian economy?
Everything here is closed down. Here was a kaфе, now it's forhand. How painful, how frustrating!
Yes, there are stories of growing economic struggle in one of the world's largest oil and gas producing powerhouses. So is the toll of the Ukraine war beginning to tell?
We understand it's going wrong. No future. They stop investing in a people, in a in a future, in a in the long run.
They try to survive.
How are Ukrainian drone attacks on refineries and Wildberries warehouses disrupting the Russian supply chain?
Unpicking the reality of Russia's economic pain. That's business daily from the BBC.
Não tá mais hoje!
Filling up at gas stations in Russia seems to be getting increasingly stressful these days.
What's that?
This was an argument over alleged Q jumping. Russians are having to wait six hours or more sometimes to fill their fuel tanks. The reason? Well, largely this is due, it seems, to Ukraine's sustained drone attacks on Russia's oil refineries. And not just those, Ukraine's extended its attacks to include retail warehouses as well. Like the wild berries chain, known as Russia's Amazon. This was the scene of panic after one recent strike in Jakaterinberg. Some small business owners who house their commercial products inside Wildberries say they've been ruined.
That's it, that's over. My brand officially no longer exists because we have nothing left. The kalendina warehouse burned down. No inventory and no savings to keep going somehow. Avem white out.
What do rising prices and the collapse of small businesses reveal about Russia’s wartime economy?
The lament of one former small business owner. Prices are rising rapidly, and the struggle to get by in Russia is affecting all aspects of life. Take the picturesque Black Sea town of Sochi, Vladimir Putin's favourite resort, which hosted a recent edition of the Winter Olympics. After repeated Ukrainian drone strikes there, locals say it's become a commercial ghost town. Друзья, мы сейчас в районе улицы цветочной, посмотрите, здесь ассоциации.
But is it really so bad across Russia as a whole? Yes, it's true, inflation and interest rates are up, but President Putin points out that unemployment remains low, and in a press conference last month he said that the economy was actually still growing.
Economic dynamic.
Economic dynamics are generally modest but positive. GDP growth is around one percent. It is clear that economic growth is affected by a number of factors, including external pressure and terrorist attacks on industrial facilities and infrastructure. Of course, there are no critical consequences from such attacks.
But economists say that this growth is unsustainable long term because it's only government spending that's driving it. The state coffers are running low, the deficit is rising, and the low unemployment rate may not be the sign of strength that Vladimir Putin claims. The BBC Russian Service economics editor is Olga Shamina.
Russia had a very poor demography. Its fallen population is very, very bad. And of course, this leads that Russia have a big shortage of working force. So Russia has very low unemployment rate due only to this lack of working people. So the new wave of mobilization will make this labor shortage again more even more sharper. So that's a big problem. Problem and it pushes out of the country people who have opportunities to live, who has competence, who have money, who have skills, and so on. So it will be Frustrating for Russian economy because it also loses good human capital, actually.
Meanwhile, certain indicators like inflation and interest rates are are historically high still in Russia.
Actually, they're not getting high because Russian economy was very underfinanced before the war. The government didn't invest in the economy, in society, and so on.
How is the Russian government’s economic data (inflation, GDP growth, unemployment) reflecting the war’s impact?
They make reserves. They made reserves. And so on, when the war started, it pushed a lot of money into the economy. And it uh led uh to these uh big, big numbers on inflation. And Russian Central Bank It made rates very high to fight with it. So when it uh it came to the point now that uh Russian small middle business which is not connected to military section, uh it is under financed because it it can't actually go to bank and uh take a loan because it's too expensive.
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Chapters
7 chapters
1
What is the current state of fuel shortages and long queues at Russian gas stations?
0:01–0:40
2
How are Ukrainian drone attacks on refineries and Wildberries warehouses disrupting the Russian supply chain?
0:40–2:12
3
What do rising prices and the collapse of small businesses reveal about Russia’s wartime economy?
2:12–5:00
4
How is the Russian government’s economic data (inflation, GDP growth, unemployment) reflecting the war’s impact?
5:00–7:45
5
Why are banks, loans and the black market becoming essential for Russian entrepreneurs?
7:45–11:46
6
What are the social and economic consequences of the new mobilization and labour shortages?
11:46–15:27
7
How anxious are Russian citizens and what does consumer optimism look like amid the conflict?
15:27–17:24
Speakers
1 identifiedMore from Business Daily
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