Ukraine vs. Russia: economic view. The change between 2014 and 2025

Ten years ago, the economies and populations of Russia and Ukraine were compared on this blog. This is a follow-up. I have not changed the original text. Charts speak louder than words. Since the TED database was no longer available to me, I used the Maddison Project Data (originally from TED).

Russia and Ukaraine are the two largest parts of the former Soviet Union. We borrow data from Total Economic Database (TED/MPD), provided by Conference Board (CB/MPD), to characterize them economically. In 1980, the total population of Ukraine and the Russian Federation was 50 and 139 million respectively. Figure 1 shows the evolution of the total population since 1950 as estimated by CB. We have alreadypresentedthe depopulation scenarios in Russia and Japan in this blog before. The situation in Ukraine is even more dire. Figure 2 shows the comparison of population evolution normalized to 1980; Ukraine has lost 15 percent of its total population since 1990.

Figure 1. Evolution of total population.

Figure 2. Total population in Russia and Ukraine as normalized to the respective levels 1980. Depopulation of Ukraine is dramatic since 1990.

 

The overall depopulation has made it difficult for Ukraine to follow a steady path of growth. Figure 3 illustrates the evolution of the GDP per capita of Russia and Ukraine from 1980 onwards (the first available estimate in the TED database). For Ukraine's current (2013) GDP per capita is $4,870, while Russia's is $9,526. The peak GDP per head for Ukraine was in 1989 at $10,000, and the current level is around 77 percent of that. In other words, Ukraine is still in the 1970's, while Russia has added 18 percent to its 1989 level.

 

All in all, Ukraine needs immediate help.

Figure 3. GDP per capita in Ukraine and Russia since 1980. 

Figure 4. GDP per capita normalized to 1989.

 

Новая резервная валюта еще не появилась, но она уже неизбежна

Текущие политические и экономические  события, которые во многом определяются перераспределением глобальных сил, часто вызывают дискуссии о необходимости или вреде появления новой резервной валюты. Перераспределение экономической мощи в мире очевидно - среди 4 самых больших экономик мира по реальному ВВП (по ППС) США осталась в одиночестве. Такие крупные страны как Япония и Германия, занимавшие ранее более высокие позиции катятся вниз, а на замену им идут Бразилия и Индонезия. При этом резервной валютой до сих пор является доллар. 

Основными требованием, на котором основано само существование резервной валюты, является, казалось бы, эфемерное понятие, которое трудно выразить одним словом, но относится к понятиям доверие/уверенность в/надежность ... Доверие это не чувство, а баланс выгоды и убытков, которые страны могут нанести друг другу с помощью валюты и не только. Пока США приносила больше выгоды вместе с долларом, многие страны не прибегали к второй части доверия.  как только США сделали доллар оружием, многие позадумались о возможном смещении баланса доверия в сторону повышенного ущерба. 

Конечно, новая резервная валюта не может возникнуть из ниоткуда. Для этого нужно доверие между многими странами, то есть баланс выгоды и потенциального ущерба, который можно нанести другим за невыполнение условий доверия. БРИКС, ШОС и более мелкие по экономике организации состоят из практически непримиримых соперников, которые не доверяют друг другу. Однако, они притягиваются друг к другу теми силами, что создает США, давя на каждого из них и всех вместе. Доверие между этими странами становится возможным как способ нанесения ущерба доллару в ответ на давление. Это объединяет РИК и других. Резервная валюта необходима им как для снижения ущерба от США, так и восстановления потерянной выгоды.  Новая резервная валюта еще не появилась, но она уже неизбежна. Доверие - страшная сила.

A new reserve currency has not yet appeared, but it is already inevitable

Current political and economic events, which are largely determined by the redistribution of global forces, often cause discussions about the need or harm of the emergence of a new reserve currency. The redistribution of economic power in the world is obvious - among the 4 largest economies in the world by real GDP (PPP), the United States is left alone. Such large countries as Japan and Germany, which previously occupied higher positions, are sliding down, and Brazil and Indonesia are moving to the bottom. At the same time, the reserve currency is still the dollar.

The main requirement on which the very existence of a reserve currency is based is a seemingly ephemeral concept that is difficult to express in words, but relates to the concepts of trust/confidence in/reliability ... Trust is not a feeling, but a balance of benefits and losses that countries can inflict on each other with the help of a currency. While the United States brought more benefits together with the dollar, many countries did not resort to the second part of trust. as soon as the US weaponized the dollar, many began to think about the possible shift in the balance of trust towards increased damage.

Of course, a new reserve currency cannot appear out of nowhere. It requires trust between many countries, that is, a balance of benefit and potential damage that can be inflicted on others for failure to fulfill the conditions of trust. BRICS, SCO and smaller economic organizations consist of almost irreconcilable rivals who do not trust each other. However, they are attracted to each other by the forces that the US creates, putting pressure on each of them and on all of them together. Trust between these countries becomes possible as a way to inflict damage on the dollar in response to pressure. This unites RIC and others. They need a reserve currency both to reduce damage from the US and to restore lost benefits. A new reserve currency has not yet appeared, but it is already inevitable. Trust is a terrific force.

Food price inflation in Russia in July 2025 is 1% higher than in July 2024

 one can look at the graph of changes in food and other prices here (see figure). In 2024, the rate of growth (inflation) of food prices was significantly lower (by 1-3%) than in 2025. Food is the largest part of the consumer basket - 50%. In July 2025, overall inflation (8.8%) is, of course, slightly lower than in 2024 (9.1%). However, food prices are rising faster, which is most painfully felt by the majority of the population, whose income is below average. The reduction in the Central Bank rate is good for the rich, but it hits the poor hard. (The Gini coefficient in Russia is 0.408 in 2024 and is gradually growing - income inequality is rapidly increasing.) I wonder how much the food price index will grow in August-October. Last year, prices quickly fell to 9% in October from 9.7% in July. Now in July it is 10.79%. In April it was 12.66%.

Инфляция продовольственных цен в России в июле 2025 на 1% выше чем 2024

Можно посмотреть на график изменения продовольственных и других цен здесь (см рисунок). В 2024 скорость роста (инфляция)  стоимости продовольствия был значительно ниже ( на 1-3% ) чем в 2025. Продовольствие самая большая часть потребительской корзины - 50%. В июле 2025 общая инфляция (8.8%), конечно, немного ниже чем 2024 (9.1%). Однако, продовольствие дорожает быстрее, что больнее всего ощущает большинство населения, доходы которого меньше среднего. Снижение ставки ЦБ полезно для богатых, а для бедных бьет наотмашь. (Коэффициент Джини в России  0.408 в 2024 и постепенно растет - неравенство доходов быстро увеличивается.) Интересно, насколько вырастет индекс цен на продовольствие в августе-октябре. В прошлом году цены быстро падали до 9% в октябре с 9.7% в июле. Сейчас в июле 10.79%.  В апреле было 12.66%. 

Are the previous guarantees of the west being lifted for ukraine? No "Whatever it takes" anymore?

Some logic behind the discussion of the new set of "guarantees" of the west.  they have already offered all the guarantees. "whatever it takes" from biden has been the main guarantee of the west to ukraine for three years. " It didn't work. Now, it turns out that the old guarantees are NOT "whatever it takes" and are being withdrawn? It's indecent, and unsympathetic, and unhygienic.

Старые гарантии запада украине снимаются? Теперь НЕ "все что потребуется?"

немного логических рассуждений о новых гарантиях запада украине. Все считали,  гарантии они уже дали. "whatever it takes" от байдена уже три года как главная гарантия запада украине. куда уж больше - "чего бы это не стоило". не сработало. получается, что старые  гарантии "ничего не стоят"  и снимаются? неприлично, и несимпатично, и негигиенично. 

Trump is right to fire the BLS top manager

 

Who follows the BLS releases and reviews knows very well that the published figures are prone to larger revisions. The data has to be revised as a number of small and large correcting mesurements is a routine process. The mistake of the BLS is that nobody reads the uncertainty of the numbers they publish. It's difficult to find these uncertainties even for professisonal economists (and they do not care). Other economic agencies have the same severe problem. The BEA had to resive the 2001 real GDP growth rate from -0.8% to +1.3% (+2.1% difference) and the previously announced (technical) recession gone. Trump does not know about the acciracy of these measurement and thus is 100% right. The BLS (BEA ...) are not professional. For example, from 1 to 2 million labor force correction for the previous year often pubished by the BLS is unacceptable. For the year of 2024, the CPI inflation was corrected up from the previous year. This means that the contemporary POTUS could make positive image from it despite it was not true (was it BLS political decision?) Definitely, one can interpret these (and many other) results as politically driven fraud. The way they present data is wrong and has to be changed. Otherwise, the poor or good figures can be used in the political discussion as if they have some meaning and relevance. The next chief will follow the instructions from Trump. This will be wise as the data are corrupt anyway.

On the spread of hazel seeds to the east

In recent days, the problem of spreading such a noble plant as hazel to the west has been increasingly discussed. As is known, hazel seeds are very light and fast. One should not neglect their possible super-fast spread to the east. Russian agronomists successfully transplant such plants even to places with a harsh climate. In Chukotka, it is quite possible to create favorable conditions for hazel. The Google map shows the zone of rapid seed spread with a tailwind. According to meteorologists, the radius of unstoppable flight can reach 5,500 km, which is marked with a larger yellow circle.

О распространении семян орешника на восток

В последние дни все чаще обсуждается проблема распространения такого благородного растения как орешник в западном направлении.  Как известно, семена орешника очень легки и быстры. Не следует пренебрегать возможным их сверхбыстром распространением и на восток. Российские агрономы успешно пересаживают такие растения даже в места с тяжелым климатом. На Чукотке вполне возможно создать для орешника благоприятные условия. На карте гугла приведена зона быстрого распространения семян с попутным ветром. По оценкам метеорологов радиус непрерывного полета может достичь 5500 км, что отмечено желтым кругом. 

Giffen tarrifs - "Nobel Prize" goes to Trump

There is a famous economic chimera  - Giffern goods. This term means that the increase in price leads to increasing demand for this goods. This, obviously, cannot  be realized in real world as the amount of money and goods are both limited and real run away is not possible. Locally and shortly, this effect can be observed as an outlier. Trump has invented "Giffen tarrifs"  - long term increase in money flow paid by importers. Ideal tool to push economic growth. I am sure that Trump deserves the "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel". Then the prize has to be renamed  - Trump prize in economics. If his trick works then the old-fasioned economic theory is just a heap of old garbage!

Go, Trump, go!!!