The Wall Street Journal concluded that the Russian economy has become dependent on the war in terms of jobs, wages and growth. Accordingly, if a truce is achieved on the front, the aggressor country will be on the verge of collapse.
Points of attention
- The cessation of war-related production could result in slower growth or recession in Russia in the near term.
- Experts predict that the decrease in domestic consumption following the end of the war could further impact Russia's economy.
Putin is afraid to stop the war
According to Heli Simola, a senior economist at the Bank of Finland's Institute of Economics, almost half of the aggressor country's economic growth in 2024 was directly due to war-related production.
It is also impossible to ignore the fact that payments to the families of Russian invaders fighting in Ukraine have increased the well-being of some of the poorest regions of the country.
Experts predict that the cessation of such stimulation will lead to a decrease in domestic consumption.
If Russian dictator Vladimir Putin wants to avoid economic collapse, he will have to continue spending at current levels long after the war is over.
If military spending is cut, it will lead to job losses and general disillusionment in many Russian regions, said Janis Kluge, a Russia expert at the German Institute for International and Security Affairs.
According to Capital Economics forecasts, the decline in spending could lead to slower growth or even recession in Russia in the near term.
