GDP is the bluntest of economic measures, a single number made to describe the trillions of events and decisions that make up a modern economy. It has its uses, nonetheless, and its main purpose is to tell the simplest possible story about the direction an economy is headed: is it growing or shrinking? But simple stories are often misleading. Take the IMF’s pronouncement in April that Russia’s economy would grow faster than any of the G7 countries: Russia was winning the race! The Russian economy, commentators held, was “roaring”; it was “on steroids”.
The truth is that the same measures that have allowed Russia’s economy to appear to be growing are forcing it ever closer to disaster. Putin’s reputation for economic competence is about to run out, and he will not be saved by a friend in the White House.
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