Putin's record armor's budget: ruble in the crisis!

Putin's record armor's budget: ruble in the crisis!

The Russian President Vladimir Putin has approved a budget plan for 2025, which can come up with a budget of around 13.5 trillion rubles (around 137 billion euros). According to this plan, 32.5 percent of the budget should flow into national defense, which further intensified the preparations for the continuing war of Russia against Ukraine. It is already evident that the sanctions and the latest political events, especially the election of Donald Trump as US President, put the ruble under great pressure. Last week, the ruble experienced a dramatic drop in the course that reduced it to a value of over 108 rubles per dollar, the deepest stand since the beginning of the conflict href = "https://www.heute.at/s/ekordbudget-so-massiv-ruestet-putin-fuer-war-auf-120075973"> Today.at reported.

weak currency and increasing inflation

The location of the ruble is alarming, which is even reflected in Putin's statements during a trip abroad, where he emphasized that the situation was "under control" and there is no reason to panic. Experts such as Michael Rochlitz from the University of Oxford blend western sanctions, especially against banks in India and China, and the measures now also imposed against the Gazpromank for the weakening currency. These steps lead to the demand for the ruble drops sharply, which also heats up inflation. The Russian central bank recently increased the key interest rate to 21 percent, which significantly restricts access to loans for the population and further puts the purchasing power under pressure, so ZDF .

Despite these economic challenges, Putin plans to further expand armaments investments in order to finance the war against Ukraine. The increasing inflation, which is currently estimated at 8.5 percent, brings up the prices of food in many places, which affects people's quality of life. This leads to resentment among the population, while the government also relies on massive government spending in the defense area, which is a contradiction in the current economic situation. It remains to be seen how geopolitical developments will affect the Russian economy and currency.