“Lately, the income of foreign branches of Russian companies is incomparable with domestic profits, and foreigners in Russia do not earn much money, so, in fact, the GDP remains the same, which, according to the World Bank, is $14,250 per person per year in Russia,” Zubets explains.
At the same time, he said, it should be understood that the nominal estimate of GDP says little about the real development of the economy.
“The fact is that the purchasing power of one dollar in different countries can differ significantly. In countries with an overvalued exchange rate, such as Norway, for example, one dollar can buy several times less goods than in other countries where the purchasing power is higher. Russia belongs to the second group of countries, so it is more important for us to calculate GDP not in nominal dollars, but in dollars in purchasing power parity. If we take the same World Bank data on gross per capita income in purchasing power parity, we get a completely different result: gross national income of $43,000 per person per year. This is comparable to the figures for Hungary and Romania, and higher than, for example, those for Slovakia, Greece or Bulgaria. This again indicates that the Russian economy maintains a high standard of living, comparable to that of fully developed European countries, despite the sanctions.
