“However, in practice, the Russian economy is in a much worse state than Putin is trying to present.”, — write: www.unian.ua
However, in practice, the Russian economy is in a much worse state than Putin is trying to present.
Putin is trying to convince Washington that increased sanctions pressure will not have the desired effect on the Russian economy / screenshot from the videoKremlin dictator Vladimir Putin is trying to present the Russian economy as capable of withstanding a protracted war in Ukraine. And most likely, it is necessary for the Kremlin in order to prove the false thesis that Russia’s victory is inevitable. Analysts from the Institute for the Study of War write about this.
So, in particular, Putin said that by the end of 2025, Russia’s GDP will be about 1%, and inflation will be at the level of 6% or even lower. Meanwhile, the Central Bank predicts inflation at the level of 4-5% in 2026. Putin also said that Russia can now allegedly increase “economic momentum” while maintaining low unemployment and moderate inflation.
However, in practice, analysts say, the Kremlin’s recent economic policies show that the Russian economy is in much worse shape than Putin is trying to portray.
Thus, the Kremlin dictator is trying to convince Washington that increased sanctions pressure will not have the desired effect on the Russian economy and will not force Putin to compromise in order to end the war against Ukraine. Also, in his speeches about the economy of the Russian Federation, Putin does not discuss the war in Ukraine. Most likely, this is done in order to combine their claims about the Russian economy with the false narrative that Russian victory on the battlefield is inevitable
Both narratives, according to analysts, are aimed at forcing the West and Ukraine to capitulate to Russia’s demands now, for fear of intensifying and prolonging Russian military operations in the future. At the same time, as ISW points out, the West and Ukraine can exploit several key Russian weaknesses on the battlefield and in the economy to force the Kremlin to negotiate and make real concessions. After all, Russia’s victory is not inevitable.
Economy of the Russian Federation: important newsEarlier it became known that in Russia for the first time in five years the decline of investments began. This happened against the background of high interest rates of the Central Bank and slowing down of the economy. Therefore, only in the III quarter, investments decreased by 3.1% y/y. This was last recorded in the III quarter of 2020.
Meanwhile, ABC News reports that amid declining oil revenues and a general deterioration in the economy, the Kremlin plans to replenish its war budget by raising taxes on ordinary Russians and small businesses. Therefore, from January 1, the rate of value added tax (VAT) will be increased in the country – from 20% to 22%. What will affect the pricing of most goods in the Russian Federation.
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