Putin praises Russia's war economy - critics speak of illusions

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Since the comprehensive invasion of the Ukraine in 2022 Russian economy exceeded expectations. The economic key figures are not consistently positive, but also not catastrophic. Last year, the war economy is expected to grow faster than that of the United States and all larger European economies. Unemployment is at a record low. And even if the growing defense budget charges other expenses, it could only be short -lived.

Russia's economic strength and its perception

These statistics send a message to the domestic and international public, explains Elina Ribakova, Senior Fellow at the Peterson Institute for International Economics. The message is to the Russian population: "We are still standing." The allies of Ukraine are conveyed: "We can hold out."

Presenting a picture of Russia as an economic strong consequences. In the West there are doubts as to whether the sanctions imposed by the supporters of Ukraine, which were dismissed by President Vladimir Putin as a mere "logistical hurdles". If you don't grab, why should you continue to try?

The illusion of resilience

other experts, on the other hand, argue that this image of resilience is a deception - carefully created by the Kremlin to make his opponents believe that the Russian economy is in good shape. While the war is approaching the third anniversary, this mask begins to crumble.

In order to explain Russia's apparent economic strength, analysts use metaphors. Some use the expression "on steroids" to describe a rapid, but unnatural and non -sustainable growth. Ribakova thinks that fits: "Steroids are good, but they still create muscles. I would not call it a muscle. It is more like running around with cocaine."

The dark sides of the war

Russia could soon feel the downside of economic growth. Row -less and more dissatisfied Russian official warn that the Russian economy is reaching its production borders, which drives prices. Inflation accelerated itself last year, although the central bank raised interest rates to 21% in October - a level that has not existed for two decades.

US President Donald Trump expressed a number of enactment in his first day in white House that the Russian economy is a sign that the country is in "great difficulties" and that Putin destroys "Russia by not making a deal" in relation to Ukraine.

future challenges

Evidence of these difficulties include the effects of new sanctions Credit bubble. Analysts agree that Russia's intensifying economic problems could make Putin take a seat faster than expected at the negotiating table and that the faction of the sanctions could be a powerful means of negotiation for the West.

financial uncertainties

The Kremlin used a strategy called "reflexive control" during the war to make the perceptions of its opponents in such a way that these decisions make Russia benefits. With every consideration of the West to deliver new technologies to Ukraine, the Kremlin warned of serious consequences that could potentially also include a nuclear attack. This tactics slowed down the arms deliveries to Kyiv and thus came to Moscow.

However, the economic challenges go beyond the war. The International Monetary Fund estimates that Russian GDP has grown by 3.8% in 2024, while only growth of 1.4% is predicted for the current year. Putin recently admitted that "the amount of products has not grown as much as consumption" - a classic warning for price increases.

FAZIT

The growing economic burdens will wiggle the social contract in Russia, according to Prokopen. "The population no longer expects justice from the Kremlin; instead, financial support awaits them," she reports. With the "dwindling" economic support - since the war investments intervene in budgets for other services - Prokopko warned of a clear divergence between the expectations of the population and the ability of the Kremlin to meet them.