Russian economy: “financial crisis” is about to hit the war machine Putin

But with Putin’s willingness to meet President Donald Trump in Alaska on Friday to discuss the end of the war, there are more signs of pressure in the Russian economy and the financial situation.

In June, Economy Minister Maxim Richnikov warned this Russia was “on the edge” of the recession. Last month, the central bank reduced interest rates by 200 basis points to revive the stopping growth.

Meanwhile, government financial resources were also under increasing pressure. The curtain and gas and gas revenues, the main source of funds, fell 27 % in July one year to 787.3 billion rubles, or about 9.8 billion dollars.

This also decreased crude oil prices, while Europe continued to add sanctions to Moscow and left the “shadow fleet” of tankers that provide Russian crude supplies.

Even with poor revenues, spending continues to rise amid Russian attacks unabated on Ukraine. In addition to weapons expenses, the incentives remain to fill more volunteers for the army as well as compensation for the families of the dead soldiers in the sky.

The result was the expansion of the deficit, as the gap for the first seven months of the year reached 61.44 billion dollars, or 2.2 % of GDP, up from 1.7 % during the first six months of the year.

The spending increased from January to July by 20.8 % compared to the same last period, while revenues increased by only 2.8 % during that period.

Economist and author Anders Oslund, who wrote Love Russia’s beloved: the road from the market economy to a clutchococcusThe situation said that the situation is comfortable enough because Russia may run out of financial reserves, forcing the discounts on public expenditures.

in Project Syndicate For example On Thursday, he indicated that Moscow has a few sources of financing because the sanctions largely closed Russia from the global financial system – and even banks from ALY China are hesitant to lend money.

So Russia was forced to take advantage of its reserves in the National Wealth Fund, which was diminished from 135 billion dollars in January 2022 to only 35 billion dollars last May, according to ålund, who expected the fund to be exhausted in the second half of this year.

He added: “The Russian economy is quickly approaching a financial crisis that would spoil its war effort.” “Although this may not be sufficient to force Putin to seek peace, it indicates that the walls are closed to it.”

Currently, Moscow has avoided sharp sanctions from the United States, as Trump has retracted this threat to impose secondary sanctions that would strike two Russian oil buyers, and instead choose to try to revive the ceasefire talks in Alaska.

A previous round of negotiations in April included a suggestion of Trump’s envoy to lift US economic sanctions on Russia, require neutrality to Ukraine, and recognition of the region that Russia seized. Ukrainian and European officials rejected these conditions, and the talks failed to conclude a deal.

On Friday, Trump expected that some lands would have to change their hands to reach an agreement this time.

He said: “You are looking at the lands that have gone through 3 and a half years – as you know, many Russians have died, and many Ukrainians have died.” “There will be some land exchange to improve the two.”

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