Analysts point out that the economy of the aggressor country is rapidly depleting its available resources due to the exorbitant costs of the Kremlin's criminal war against Ukraine.
Points of attention
- Russian economy is rapidly depleting its resources due to exorbitant costs of war against Ukraine, impacting sectors like construction and banking.
- Economic growth in Russia is expected to slow down significantly in the coming months, with forecasts indicating a decline of up to 2% in the second half of the year.
- The overheated economy of Russia, with depleted labor force reserves and production capacity, faces threats of stagflation as price increases persist.
- The intensified military industry in Russia is facing challenges due to labor shortages, equipment overload, and limited access to imported components, hindering further growth.
- The aggressive spending by the Russian government on military and defense industrial production post-war onset has strained the economy, leading to concerns of recession and collapse.
What is known about the signs of a crisis in the Russian economy against the background of the continuation of the war against Ukraine
The publication notes that the aggressor country has almost exhausted its labor resources against the background of fierce competition between military enterprises and departments.
This will significantly limit the development of the defense industry. The construction and banking sectors are no longer protected from high interest rates, as the Russian government has all but stopped implementing mortgage lending programs.
Western economists emphasize that in the second quarter of this year, Russian GDP will grow by more than 4%, but during all other months the growth rate will slow down by more than two times.
This estimate will show the last spurt of growth before the Russian economy begins to noticeably cool down, - notes economist Oleksiy Isakov.
According to his forecasts, the growth of the Russian economy will slow down to about 2% in the second half of the year and will be 0.5-1.5% next year.
It is noted that the government of the aggressor country sharply increased spending after the start of a large-scale war against Ukraine, investing most of the money in military and defense industrial production.
In addition, Russia made attempts to protect its own enterprises from the influence of US and EU sanctions.
According to the head of the Bank of the Russian Federation, Elvira Nabiullina, the economy has overheated to a degree that has not been seen since the global financial crisis of 2008.
What is the threat to the economy of the aggressor country from an increase in the labor force deficit
Reserves of labor force and production capacity are practically exhausted, - the head of the Central Bank declares.
In particular, her department raised the key interest rate by 200 basis points to 18%, the highest since the start of Russia's criminal war against Ukraine, to counter the risk of stagflation as price increases continue to accelerate.
Russia's unemployment rate, a key sign of overheating, fell to an all-time low of 2.4%, lower than any of the G7 countries.
Currently, only according to the official data of Russian statistics, enterprises lack more than 2 million workers.
The Bank of Russia closed its fleet of armored collection vehicles because many employees went to work at defense plants.
The military's need for new recruits for the war continues to put pressure on the workforce as government officials sharply increase pay for new volunteers.
Economic activity showed signs of cooling in most sectors in June, with construction growth at its lowest level since 2020, according to the Economy Ministry.
The pace of growth in the manufacturing industry, driven by military orders, was half as slow in June as in May. Growth in wholesale trade, including energy sales, slowed to less than 2% from double-digit growth in previous months.
According to Isakov, Russia's booming military industry seems to be hitting the growth ceiling from all sides due to fierce competition for labor, equipment overload and increasingly limited access to imported components.
