The Foreign Intelligence Service of Ukraine draws attention to the fact that the full-scale war that Russia launched against Ukraine has changed the structure of the enemy's economy. Over the past three years of militarization, the Russian Federation has driven itself into a trap from which it is impossible to escape without a serious crisis.
Points of attention
- Decreasing federal revenue, exacerbated by sanctions and technological restrictions, is forcing the Russian government to implement tax hikes and fee increases, further burdening businesses.
- The aggressive military strategy has led to the decline of civilian production quality, hindering Russia's ability to re-enter global markets with advanced products and technologies.
Russia is doomed to crisis
As Ukrainian intelligence notes, the enemy's defense spending has increased to almost 8% of GDP, and the military-industrial complex has become a key driver of demand.
This is what provoked the destruction of the balance, and also threw private business and civilian industries to the sidelines.
It is impossible to return to the peacetime model without a sharp decline. After the war, Moscow will begin to reduce defense spending. As a result, millions of people employed in the military-industrial complex will lose their jobs, and entire regions where defense enterprises are concentrated will be left without an economic basis. In addition, the demobilization of hundreds of thousands of contract workers will also create a shock to the labor market.
What is also important to understand is that the budget of the aggressor country is already rapidly depleting.
Federal treasury revenues have already fallen by almost 17%, primarily due to a decline in oil and gas revenues.
The Russian Ministry of Finance is already forced to raise taxes and introduce new fees, but this only puts more pressure on business.
Sanctions and restrictions on technology imports lead to the degradation of civilian production: Russian enterprises are forced to produce cheaper and simpler goods, which reduces competitiveness. In the long term, this deprives the country of the opportunity to return to global markets with high-tech products.
The de facto aggressor country found itself in a “military rent trap.”
