CHECK – War in Ukraine: has Russia really become “the world’s fourth economy”?

More than 1000 days of war and an economy that is doing well. While the international community is trying to limit Russia’s ability to continue its invasion of Ukraine by imposing economic sanctions, some observers assure, like Thierry Mariani, that these efforts are in vain. On his X account, the far-right MEP declared this Thursday, November 21 that “according to the ranking of world GDP in purchasing power parity, Russia has been the fourth largest economy in the world for two years.” “Bravo the Mayor for the sanctions”he then quipped, in reference to the comments of former Minister of the Economy Bruno Le Maire on the Russian economy, made in 2022 then in 2024.

As proof, this fervent defender of the pro-Russian narrative, involved for example (new window) in the Doppelganger disinformation campaign, shares a painting. Contrary to the accusations of some Internet users, this is indeed an authentic image. It comes from the list of countries by GDP (PPP), or gross domestic product based on purchasing power parity. Available on Wikipedia (new window)it is based on very official data from the International Monetary Fund (IMF) which updates these figures at the global level (new window) twice a year. The last update was at the end of October. And we find Russia in fourth position, behind China, the United States and India. France only comes in 9th position.

An unsuitable indicator

An observation in total contradiction with the ranking of countries by nominal GDP, dominated by the United States. Based on this data, still compiled by the IMF (new window)Russia plummets to 11th position when France rises to 7th place. So how can we explain such a paradox? Questioned by TF1info, economist Julien Vercueil explains that unlike nominal GDP, calculated from the market exchange rate, GDP per PPP uses a theoretical exchange rate.

Created and standardized by an economic formula, it is calculated in four steps. We define a basket of goods intended to represent household consumption, we measure the price of this basket in local currency, then its price in US dollars and finally, we divide the price of the basket in local currency by the price of the basket in dollars. “For example, if the basket costs 8,000 rubles in Moscow and 100 dollars in New York, the PPP exchange rate is 80 rubles per dollar”schematizes the economist specializing in Russia. This rate will therefore deviate from the current exchange rate (new window)much more volatile. His interest? Evaluate the domestic market of a state alone, for example to study the poverty line of that country.

• Read also

  CHECK – How is the Russian economy doing after two years of sanctions?

However, given that this indicator does not take into account the international market exchange rate, referring to it to draw conclusions about an international situation is misleading, according to the vice-president of the National Institute of Oriental Languages ​​and Civilizations (Inalco). “This is not why purchasing power parity exchange rates were designed by economists”he underlines in fact.

This is all the more true in the current economic situation, as the ruble continues to fall (new window). This Friday again, it reached its lowest against the dollar since March 2022, according to official figures from the Central Bank of Russia. To which are added other criteria which can influence the gap between nominal GDP and the indicator put forward by Thierry Mariani. “If few of the goods from the Russian basket used in our calculation are imported, if their quality is lower than that of American goods, if the state manipulates the prices of the goods in the basket to keep them low,” the theoretical exchange rate calculated by economists will be much stronger than the current exchange rate. “In general, the poorer the country (new window)the greater the difference between the two indicators”underlines Julien Vercueil.

In summary, the comparison of Thierry Mariani “poses a methodological problem”to use the expression of our interlocutor. This indicator “cannot be an accurate measure of a country’s economic power”. Especially since several other indicators show that Russia’s economy is not as prosperous as the MEP close to Moscow suggests.

If the Russian economy experiences “a slight growth” (new window), thanks to the war effort and arms production, the conflict and sanctions cost it 5% of its GDP, according to estimates (new window)by Julien Vercueil. Inflation is also weighing on the population. Officially around 9%, it would in reality be significantly higher. The Romir institute, which studies the price of an average basket each month, estimated it at 22% at the beginning of October. (new window) over a year. At this point, it is mainly demand and spending by the Russian government that is helping to stimulate the economy. And compensate for the exodus of Western societies for the time being.

Do you want to ask us questions or submit information that you do not believe is reliable? Do not hesitate to write to us at [email protected]. Find us also on X: our team is present there behind the account @verif_TF1LCI.