According to foreign analysts, the only thing currently saving the Russian economy from a total recession is the war against Ukraine.
Points of attention
- The Russian economy is on the verge of recession.
- Huge military spending helps to save the economy of the aggressor country, but it is a temporary solution.
- By continuing the war, Russia risks provoking a deep recession due to the depletion of resources.
Why the war against Ukraine is profitable for the Kremlin
Jay Zagorski, an economist and professor of markets at the Questrom School of Business at Boston University, made a statement on this matter.
He drew attention to the fact that, as of today, Russia's huge military budget supports its weak and declining economy.
However, what is important to understand is that this is a temporary solution to Russia's growing economic problems, including inflation and persistent currency and budget problems.
The Russian economy is currently supported by large government spending, so there will be no slowdown in any sector of the economy from which the Russian government buys goods, Zagorski said.
He also recalled the Kremlin's purchases of military uniforms, shoes, ammunition and food as part of military operations against Ukraine.
So if there had been no war, oh yes, I think a recession would have come immediately, — concluded the expert.
Putin will not be able to keep the Russian economy afloat forever
According to Yury Horodnichenko, an economist and professor at the University of California, Berkeley, while Russia continues its war against Ukraine, the time of the downturn in the Russian economy remains uncertain.
He draws attention to the fact that in 2025 the aggressor country will allocate a record 13.2 trillion rubles to the defense budget, which should help stimulate its economy.
According to the expert, such terrible costs cannot last forever.
With government money, they can keep the economy afloat, but at some point the government will run out of money and have to shut down and a recession will begin, he added.
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