Russia is struggling with major economic problems after almost three years of a full-scale war with Ukraine. The Telegraph draws attention to high interest rates, inflation and dwindling reserves.
Russia is facing growing economic problems after almost three years of war in Ukraine. High interest rates and a lack of investment are putting increasing pressure on the economy, writes Focus.de.
Russian President Vladimir Putin is nervous about the economic situation. Russia is suffering from high interest rates of 21 percent, which are hurting companies. Some experts speak of a "slow death" of the Russian economy, but others point out that it has turned out to be more stable than expected.
According to The Telegraph, the Russian National Welfare Fund has shrunk to just $38 billion due to high military spending. Russia could continue to print money to finance the war, but that would further fuel inflation. Economist Benjamin Hilgenstock emphasizes: “Ultimately, you can print money for war, but that is a very bad idea.“
Corporate bankruptcies are forecast to continue in Russia. Now Russia faces a high risk of a banking crisis. Initially, Russia's economic resilience surprised many analysts, but now signs of instability are becoming increasingly apparent.
The Kremlin publicly claims that the federation is in a stable economic state and even growing, but it is increasingly clear that this was only a temporary phenomenon, not a trend. Russia is facing a severe labor shortage, and its huge military spending has brought virtually no economic value.
Economists emphasize that the role of the United States is now even more important because Western countries can jointly impose new severe economic sanctions on Moscow to dissuade it from waging war in Ukraine. Trump has already threatened Moscow with such sanctions if it refuses to sit at the negotiating table. Most experts agree: the Russian economy survived the initial Western sanctions over the invasion, but Putin’s time is running out and the country’s financial situation is deteriorating.