Despite increasing interior problems, the Russian economy inactive allows to finance conflict in Ukraine. However, experts stress that the country's arms manufacture is operating at the limit of its capabilities and is incapable to increase the production of weapons.
Interestingly, the Russian economy recorded an increase of 4.3% last year, which is simply a better consequence than in the UK (1.1%) or the United States (2.8%). However, this increase is mainly due to large military spending and the maintenance of oil exports, although its supply direction has changed,– alternatively of Europe, it is now mainly going to China and India.
Russia besides uses alleged shadow fleets, tankers, whose owners are hard to determine, which allows to circumvent sanctions. As a result, the Russian ruble this year gained more than 40%, and according to the BBC, according to the Bank of America it became 1 of the strongest currencies in the world.
How long can Russia lead a war? hard economical situation
On the another hand, the country faces advanced inflation and the interest rate on loans has risen to 20%. Companies have problem uncovering the right employees. Global oil prices have fallen for most of the year, although they have late increased due to the conflict in the mediate East.
The Russian economy minister warns that the country is close to recession after a period of fast growth. any experts foretell that the economy may shortly begin to collapse seriously.
In turn, Evgeny Nadorszyn, an economist from Moscow in an interview with BBC News believes that by the end of 2026 the economical situation will be hard and any companies will fall. At the same time, it does not anticipate a violent crisis, according to him it's a "total lie".
One high-ranking NATO authoritative said in a conversation with the BBC that Western diplomatic activities to date did not bring any closer to the end of the war. In his opinion, Vladimir Putin is only seeking short-term agreements that will give Moscow a minute of remainder and aid to keep control of the occupied territories. On the another hand, the Ukrainian army is facing serious staff shortages.
Earlier forecasts from American analysts said Russia would be able to proceed the war for a year or a half. After this time, both money and willing to fight can end, especially volunteers who are encouraged by advanced pay.
At the end of June, president Putin approved budget changes for 2025 that show increasing financial problems. Oil and gas revenues are expected to fall by almost 25%. To balance the budget, the government reduces spending on crucial programmes supporting the economy.
