The Economist has noted that in recent months, annual growth in the Russian economy has fallen from around 5% to 0%. This has been driven not only by inflation, military investment, but also by falling oil prices amid US President Donald Trump's tariffs.
Points of attention
- In February and March, inflation in Russia reached over 10%.
- Trump is pushing the Russian economy to collapse, although he does not realize it.
Trump continues to unknowingly destroy Russia
A few weeks ago, the Central Bank of the Russian Federation officially acknowledged that several sectors were experiencing a decline in production volumes due to a sharp drop in demand.
Russia is being hit by an increasingly severe storm, and there are many reasons for this.
First of all, we are talking about the so-called "structural transformation" of the economy.
We cannot ignore the fact that in the past the aggressor country was oriented towards the West and allowed private business to develop (albeit with restrictions).
However, after the full-scale invasion of Ukraine, everything changed dramatically, and it became a war economy that turned to the East.
The Kremlin was forced to spend huge sums of money, not only on weapons production but also on new logistics chains for trade with China and India. This stage is now complete.
This year, military spending will grow by just 3.4% in real terms, a sharp slowdown from last year’s 53% jump. The reduction in spending on “structural transformation” means slower growth.
It's no secret that inflation in Russia has been exceeding the target level of 4% per year for many months.
Moreover, in February and March it reached over 10%.
The aggressor country is also significantly affected by the worsening external conditions, which were provoked by US President Donald Trump, who started global trade wars.
Trump is probably friendly towards Putin, but with his trade war he has given him a painful kick in the teeth, writes The Economist.
