Meltdown Averted But Six Months On, Russians Face Economic Pain

• Russia's economy has avoided the meltdown many predicted after Moscow sent its forces into Ukraine six months ago, with higher prices for its oil exports cushioning the impact of Western sanctions, but hardships are emerging for some Russians.
• After predicting at one point that the economy would shrink more than 12% this year, exceeding the falls in output seen after the Soviet Union collapsed and during the 1998 financial crisis, the economy ministry now expects a 4.2% contraction.
• High global energy prices have helped the Kremlin follow through on President Vladimir Putin's pledge in March to reduce poverty and inequality despite crippling Western sanctions and inflation. Some economists have compared the situation to the COVID-19 pandemic when authorities increased payments for those most vulnerable to the crisis.
• "So far, there are no signs that the drop in living standards could lead to unrest," said Alexei Firsov, founder of social studies think tank Platforma."The living standards decline has not reached the point where attitudes towards reality start to change significantly and the fridge begins to beat the TV" - a reference to a Russian saying that describes the tension between people's experiences and what state television has led them to expect.
• As it is important to note that, Inflation, which soared to a 20-year high of 17.8% in April after the rouble collapsed to a record low against the U.S. dollar, is now seen ending the year at 13.4%, according to the economy ministry.

(Source: Reuters)