High-ranking Russian official says economic slump is 'under control'

MOSCOW – One of Russia’s top officials says the economy is “not in tatters,” as President Barack Obama claimed earlier this year.

The Russian economy, battered by Western sanctions and lower oil prices, is expected to contract by 3.9 per cent this year and grow by only 0.7 per cent next year, according to the government. The average income has declined this year for the first time in President Vladimir Putin’s 15 years in power.

“The Russian economy is not in tatters, despite what several of our partners have said, but I can’t say the economy is feeling well,” Deputy Prime Minister Igor Shuvalov told the Russian parliament on Wednesday, according to Russian news agencies.

Officials bristled at President Barack Obama’s claim in this state of the union address that Russia’s economy was “in tatters.”

“Of course we are expecting a slump and a curtailment of real incomes for Russians,” Shuvalov said, but the situation is “completely under the government’s control.”

Shuvalov quoted government statistics saying that the labour market is stable and the unemployment rate is down to 5.2 per cent, from 5.3 per cent September. The unemployment rate in October last year was 5.1 per cent.

Due to the decrease in disposable income and a slump in consumption, the World Bank expects the national poverty rate in Russia to increase from 10.8 per cent in 2013 to 14.2 per cent in 2015 and 2016.