ISW analyzed how Russia is hiding “economic difficulties” due to the war in Ukraine

According to the analysts of the Institute of War (ISW), the Russian authorities are conducting an information operation to create a false impression that the Russian economy is doing well, although numerous indicators, including spending on the war against Ukraine, indicate the opposite.

Source: ISW

Literally: “The Kremlin has launched an information operation aimed at creating the false impression that the Russian economy is doing well, despite numerous indicators pointing to persistent macroeconomic turmoil.”

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Details: Russian President Vladimir Putin said during an economic meeting on January 22 that 2024 was a “strong year” for the Russian economy.

Putin said Russia has a manageable budget deficit of 1.7 percent and has achieved a 26 percent increase in non-oil and gas revenues to 25.6 trillion rubles (about US$257.9 billion) in 2024, and also announced a 9.5 percent increase in insurance and military pensions to combat rising Russian inflation.

Earlier in the day, Bloomberg reported that the Russian Ministry of Finance released a report forecasting economic growth and suggesting that Russian budget revenues in December 2024 will reach a record level of more than 4 trillion rubles (about $40 billion) – 28 percent more than in December 2023, the highest level recorded since 2011.

However, analysts note, these data do not take into account the unacceptable level of Russian defense spending, rampant inflation, the growing deficit and the erosion of the Russian national welfare fund.

Literally: “ISW continues to monitor macroeconomic data that directly contradicts the Kremlin’s claims that the Russian economy is doing well.

Experts point out that the Kremlin has recently introduced policies aimed at increasing defense spending, while Russian society is struggling with labor shortages, broader demographic problems, shrinking savings and a growing dependence on aid as the Russian economy faces rising interest rates. , inflated wages and deterioration of production capacities.

Literally: “These economic realities suggest that the Kremlin’s efforts to demonstrate economic power are largely an information operation designed to appease domestic audiences and demonstrate Russian might abroad, while obscuring the real difficulties facing the Russian economy, which are especially growing in connection with Russia’s war against Ukraine”.

ISW Key Findings for 22 January:

• The Kremlin has launched an information operation aimed at creating the false impression that the Russian economy is doing well, despite numerous indicators of macroeconomic distress.
• Russia continues its long-term efforts to form its personnel reserve with the help of organizations of the All-Russian Cossack Society and the creation of a voluntary and well-trained priority reserve, designed to protect the Kremlin from potential negative consequences in the event of a possible future partial draft of Russian reservists.
• North Korea will reportedly deploy a new military contingent to Russia by mid-March 2025, likely maintaining the current pace and intensity of grueling infantry attacks in the Kursk region.
• These new North Korean forces are unlikely to significantly improve Russian operations and will likely face the same high casualties and complications in interacting with Russian forces as the current North Korean contingent, provided the Russian command continues to use North Korean forces as they have been .
• Russian bloggers have complained and expressed concern over recent claims that Syria’s interim government, led by Hayat Tahrir al-Sham, has suspended Russian investment and financial involvement in the port of Tartus, as Russia’s long-term military presence in Syria remains unclear.
• Russian state media reported that Russia may resume direct gas supplies to Transnistria, despite recent discussions about finding non-Russian sources of gas supplies to the region.
• Ukrainian troops regained lost positions near Toretsk.
• Russian troops advanced near Chasovoy Yar, Toretsk, Pokrovsk, Kurakhovo and Velika Novosilka.
• Russia and Uzbekistan deepen military cooperation.