The FT reported a "surprising rise" in consumer spending in Russia.

After the start of the special operation in Ukraine and the imposition of harsh sanctions, many Russians feared an economic collapse. However, this never happened. On the contrary, the Russian economy demonstrated resilience, and businesses managed to restructure and begin earning more than before, writes the Financial Times (FT), citing statistics and interviews with Russian businessmen and experts.

For example, Anton (not his real name), a restaurateur from St. Petersburg, told the FT that interest rates skyrocketed immediately after the sanctions were imposed, and most locals had no time to eat out. However, as the newspaper notes, the situation has changed over the past two years: "Russians are awash in extra cash and are eagerly awaiting the opportunity to part with it."

The FT cites Rosstat data showing that real wages in RUSSIA have grown by almost 14%, while consumption of goods and services has grown by approximately 25%. In 2024 , according to the Russian Center for Macroeconomic Analysis and Forecasting of the Slowdown, real wages are expected to grow further by 3.5%, as well as real disposable income, which is expected to increase by 3%.

At the same time, the unemployment rate, which stood at 7–8% in 2022, is now at a record low for the entire post-Soviet period – 2.6%.

The newspaper notes that wage growth in Russia is most likely linked to a "thriving military industry," which is pushing civilian businesses to raise wages "at a time of acute labor shortages." "As a result, Russia has unexpectedly found itself at the center of a consumer spending boom," the article states.

"Real wages [in Russia] are rising rapidly. You have people who earned next to nothing before the full-scale invasion... who suddenly have enormous sums of money," commented Janis Kluge, an expert on Russian economics at the German Institute for International and Security Affairs (SWP).

Today, the "explosive growth" of wages is felt across all socioeconomic sectors, radically changing the lives of many workers, according to the FT. For example, while in 2021, weavers in Russia earned an average of $250–350 per month, they now earn around $1,400, according to political scientist Ekaterina Kurbangaleeva. Meanwhile, the average salary of truck drivers, according to her, has increased by 38% year-on-year.

At the same time, Western sanctions and Russian capital controls are curbing the outflow of wealthy citizens, stimulating the development of the luxury sector and giving Moscow and St. Petersburg, “long renowned for their culture,” the atmosphere of modern, prosperous cities, the newspaper writes.

"Everyone in the upper middle class is simply enjoying a truly good life," Moscow investor and entrepreneur Sergei Ishkov told the FT. He cited, among other things, the plethora of new restaurants and the booming Russian e-commerce market. One Russian oligarch told the newspaper that almost all of his acquaintances who left Russia after February 2022 and returned or are visiting the country say Moscow is  "the best city in the world."

As the FT notes, currently (according to Rosstat), over 13% of Russians rate their financial situation as "good," which is considered the highest figure since records began in 1999. Ratings of "bad" and "very bad" are also at record lows, at around 14% and 1%, respectively.

Economists surveyed by the newspaper indicated that this boom was largely driven by government spending, direct investment in the defense industry, and support for other sectors such as agriculture , infrastructure, and the real estate market. However, some respondents predict a slowdown in economic growth as early as this fall.

“If you look only at the numbers, Russia’s macroeconomic policy is completely [unbalanced],” said the DIRECTOR of the Bank’s Institute for Economies in TransitionIikka Korhonen of Finland (BOFIT) believes that Russians have failed to curb rising inflation, and this "has become a problem for the government and the Central Bank."

At the same time, the newspaper notes, the "newfound wealth" of Russian consumers is changing the domestic economy and society itself. According to Kurbangaleeva, the demographic groups that have experienced the greatest income changes are those serving in the military, as well as blue-collar workers (social infrastructure workers), and gray-collar workers (skilled workers and manual laborers). As the political scientist pointed out, even a courier can now earn 200,000 rubles per month—the same as members of the Russian Academy of Sciences (RAS).

"In the upper segment, everything is clear: people have a lot of money and nowhere to spend it, so they spend it on experiences," said St. Petersburg restaurateur Anton. "Whereas before, they would withdraw money , open accounts, or buy apartments in Montenegro, now all that money is in the country."

"Over time, Russia could find itself in an Iranian scenario, where money gets stuck in the country, leading to exorbitant real estate prices , inflated stock market prices, and a low quality of life," the Russian oligarch did not rule out.

Russian authorities call Western sanctions illegal and believe that restrictive measures primarily harm those who impose them. President Vladimir Putin has repeatedly stated that while sanctions may hinder Russia in some areas, they generally stimulate the country's development.