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Putin's war ruins: Russia's economy is tumbling into crisis!
Vladimir Putin's militarization of the economy is pushing Russia to the brink of recession. High war spending is increasingly putting pressure on the central bank and various sectors.
Putin's war ruins: Russia's economy is tumbling into crisis!
MOSCOW - Russia's economy is sliding further into crisis as the impact of the Ukraine war becomes increasingly clear. Vladimir Putin, as he seeks to stabilize some cornerstones of the economy, faces steep challenges. The situation in the country is critical and the burdens can no longer be denied. Military spending is rising to dizzying heights - a sign that the Kremlin's economic situation is precarious.
The numbers speak volumes: Putin's defense budget is expected to rise to a stratospheric 13.2 trillion rubles by 2025, which amounts to an incredible 6.2 percent of gross domestic product. Analysts warn that this exorbitant spending will provide only short-term relief and may cause the economy to overheat. Last week, the Russian central bank cut interest rates to 21 percent - the highest since 2003, and the main reason for this is the explosion in military spending. This relentless inflation is an alarm signal for the entire Russian economy.
The shadow of recession
Experts speak of an impending “recession” or even a “burnout” of the economy if Putin does not change course in the allocation of resources. A recent report from the Thinthanks Institute for the Study of War shows that the consequences of “burnout” would be devastating for society. The military, which is increasingly reliant on outdated technology, is struggling against material losses and cannot keep up with the high demands. The defense industry is unable to keep up - a disastrous result that further strains military operations and shows that Western sanctions are already having their noticeable impact.
Despite the bleak outlook, Putin plans to drastically cut government spending on education, health and civilian infrastructure to focus on the military. Several economic sectors in dire need of workers face the challenge of competing not only with the military's massive imaginations, but also with the supporting effects that military mobilization promises. While entire sectors of the economy are fighting for existence, Putin apparently continues to believe in some kind of stability for the coming years - a dangerous game that could lead Russia into a deeper crisis.