Russia's poorest regions show drastic increase in bank accounts due to bereavement compensation

Several of Russia's poorest regions have shown an abnormal increase of funds in bank accounts, with experts explaining that this is due to payments for participation in the war against Ukraine.

Source: Radio Liberty

Details: With an average increase of 6 to 9% in the previous five years, Altai Krai showed an increase of 18.95% in 2023, with 33.26% in Buryatia, and a record 57.57% in Tyva.

The author of an analytical report published by BOFIT – the Institute for Emerging Economies (operated by the Bank of Finland) said that such a sharp increase in the funds in citizens' bank accounts is explained by payments to contractors and conscripted soldiers participating in the war with Ukraine. The population's welfare is also boosted by bereavement compensation paid to the families of the soldiers who were killed, and there is also a payment to wounded soldiers.

After comparing the list of regions that showed the maximum increase in bank account funds and the regions that sent the largest number of conscripts to the war, researcher Laura Solanko concluded that there is a consistent link between the increase in the population's welfare in these regions and the proportion of conscripts.

Meduza, a Latvia-based Russian news outlet that was the first to draw attention to BOFIT's analytical report, stated that the sharp increase in bank account funds cannot be explained by higher inflation in these regions, the specifics of their banking market, or other macroeconomic factors.

Altai, Buryatia and Tyva are among the poorest Russian regions. They have the largest share of casualties among the Russian military involved in the full-scale invasion of Ukraine, as BBC noted in a study based on a list of 45,000 Russian soldiers who were killed in action. 

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