Igor Lipsits, one of Russia’s most prominent economists, says the real state of the country’s economy under Vladimir Putin is “bad,” despite optimistic statements from the Kremlin and its propagandists, Business Insider reports.

The other day, Lipsits said in an interview with Reuters that Moscow’s optimistic forecasts about the state of the economy are not a reliable indicator of the real situation, as the authorities are trying to please the Kremlin.

His comments came as the Russian economy appears more resilient than many analysts had expected, who had predicted a collapse amid Western sanctions and huge spending on the war in Ukraine.

Official data released by Moscow showed that Russia’s GDP grew by 5.5% in the third quarter of this year, after contracting by 3.5% in the same period in 2022.

But Lipitz says that, even if the data is to be believed, the economic growth is in no way felt by average Russians.

“A large part of the Russian population has very low wages,” he told Reuters. The fact that Moscow’s central bank has repeatedly raised the benchmark interest rate to 15% to stem the collapse of the ruble also means that Russians are forced to take on more debt.

Russia’s economic growth means nothing to ordinary people

Lipsits says that about 20 million people in Russia, about 14% of the population, live on the poverty line or are already in poverty.

Instead, official figures from Moscow say there are 15.7 million Russians in this situation who earn less than 14,184 rubles a month, equivalent to $162.

Inflation in Russia reached 7-7.5%, after last year 11.9%. However, measures taken by the Central Bank managed to at least stop the fall of the ruble.

But Lipsits says he expects the Kremlin’s best-case scenario to see the Russian economy stagnate after next year’s presidential election, but a major contraction is more likely.

Lipsits, who lives outside Russia, was a professor at the prestigious Higher School of Economics in Moscow, but was left without a chair after the university told him in September that it had unilaterally terminated his contract.

Lipsits is one of the most famous economists in Russia, because his economics textbooks have been used by schoolchildren for two decades. But in 2019, Russian schools abandoned them after a commission of “experts” decided they weren’t patriotic enough.

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