Not only Ukraine, but all its allies have been waiting for a long time for Russia's economy to collapse against the backdrop of a war of aggression and powerful sanctions pressure. For 3 years, the aggressor country has held out, but the time of reckoning is finally near.
Points of attention
- Russia's economic collapse is becoming quite likely due to increasing sanctions pressure and Putin's failed policies.
- Experts' forecasts indicate a possible credit crunch and a slowdown in GDP growth in 2025.
- The social contract on which Putin's regime rests is in danger of ultimate failure.
Putin created the illusion of a strong Russian economy
The situation in the aggressor country was commented on by Elina Rybakova, a senior research fellow at the Peterson Institute for International Economics.
She drew attention to the fact that Russian dictator Vladimir Putin regularly sends a double message: to Russians — "We survived," and to Ukraine's allies — "We will last longer than you."
According to experts, the image of Russia's economic power is actually a mirage.
This has become obvious to most of Ukraine's partners. As you know, recently, US leader Donald Trump has publicly stated several times that the Russian economy is close to collapse — these are not empty words.
Interestingly, some analysts use the metaphor of an "economy on steroids" to describe the situation.
"Steroids are good, but they're not muscles. It's more like running on cocaine," Rybakova notes.
2025 could be fatal for Russia
What is important to understand is that many economists predict a credit crunch in the aggressor country.
However, even if this does not happen, there will still be plenty of problems.
For example, the IMF expects Russia's GDP growth to slow to 1.4% in 2025 after growing by 3.8% in 2024.
We cannot ignore the fact that inflation has already reached 9.5% in 2024, compared to 7.4% in 2023.
Some supermarkets are even forced to lock away essential goods in their cupboards due to increased theft. Problems in the labor market are also creating tensions. Despite the low unemployment rate (2.3%), a shortage of skilled workers is forcing companies to raise wages, leading to inflationary pressures.
Experts believe that the worsening economic challenges are undermining the social contract on which Putin's regime is based.
