“The real retribution for the aggression against Ukraine is yet to come for Russia.”, — write: www.unian.ua
The real retribution for the aggression against Ukraine is yet to come for Russia.
Economic troubles in the Russian Federation are rapidly worsening / photo REUTERSWestern sanctions are gradually stifling Russia, no matter what the propaganda says. The economic situation may deteriorate significantly by the time peace negotiations with Ukraine begin, writes Le Monde.The newspaper notes that Russian propaganda carefully hid the economic consequences of the war, for example, significantly understating the official inflation rate. When 8.5% per annum was officially declared, de facto inflation can be twice as high. This is indirectly indicated by the astronomical 21 percent of the key rate of the Central Bank – the instrument with which Moscow is trying to repay the seemingly not so catastrophic inflation.
A high real inflation rate and a too high key rate suppress business activity in Russia. Enterprises can no longer afford to use bank loans and are canceling large investment projects. And payments on previously taken loans grow every time the Central Bank raises the key rate.
Le Monde points out two consequences of this, which could lead to further deterioration of the situation. First, Russian Railways, the country’s largest employer and a key player in the logistics market, has already announced its intention to cut investments by a third by 2025. Secondly, due to the curtailment of the subsidized mortgage program and the increase in interest rates on conventional loans, the Russian residential real estate market was on the verge of collapse. A speculative price bubble of colossal size has long been formed there, which can burst at any moment.
All this is happening against the background of unprecedented spending on the unproductive part of the economy – on the army and the police. Starting next year, Russia will spend up to 40% of its budget on them. At the same time, budget revenues from oil and gas continue to decrease – both due to the loss of Western markets and due to sanctions that prevent free trade with the rest of the world.
“Contrary to propaganda, when Russia sits down at the table for future peace talks, which seem imminent, it will now face the stagflation and suicide that have destroyed its future. We must never forget that the consequences of sanctions are gradual and cumulative. Moscow has not yet paid for his “special operation”, – writes Le Monde.
The situation in the Russian economyAs UNIAN wrote, the Russian economy survived the full-scale invasion of Ukraine and the introduction of Western sanctions, but by the end of the third year of the war, critical problems in it became apparent. Among the main problems are an acute labor shortage, high inflation and high interest rates on loans.
Rising prices for regular butter became a symbol of economic troubles in “SVOshnaya” Russia. Now, in supermarkets, you can see how a magnetic signal device is attached to packs of butter to prevent theft. Usually, only expensive delicacies, for example, red caviar, are protected in this way.
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