German periodical Welt praises Russia for its paradox economic growth against the backdrop of protracted Western sanctions. Even minor GDP growth signals that Russia’s economy eventually gained momentum and is picking up steam after lengthy recession. German economists make a conclusion that Russia’s economy has benefited from the sanctions. Notably, this research defies the sentiment among Russian nationals who are struggling with high consumer inflation, rapid depreciation of the Russian ruble, and falling purchasing power. The pro-Kremlin mass media is making efforts to assure the population of the progress in the domestic economy. So, the complimentary article by Welt is like music to the Kremlin’s ears. Interestingly, the German periodical does not provide precise figures on Russia’s economic growth but judges economic health on state budget surplus. Indeed, in Q3 Russia’s current account posted the first surplus of $26.4 billion after years of deficit. This figure equals 6.5% of GDP, thus making an absolute record.
The question is where this budget surplus came from. On the surface, there are no reasons for the paradox growth. The Russians are fed up with a large team of non-professionals as high-ranking officials. Russian hi-tech companies still cannot suggest competitive technologies on a global scale. The domestic agriculture still cannot provide enough produce for the population, so that Russia has to import even the basic food. Citing Welt, growing oil prices account for the sensational budget revenue. Another reason is that the dynamic of the Russian ruble does not relate directly to oil prices any more. Remarkably, Russian pundits say that the feeble national currency contributed to the economic growth. Indeed, the weak ruble inflated price tags of quality imports. In other words, the Russians have no choice other than to buy cheaper domestic goods. As a result, imports contracted whereas export revenues jumped.
