Imbalance in the rf’s Economy: Civilian Businesses Have Lost out to the Military Machine

russia’s economy, which is in a deep systemic crisis, is being masked by propaganda with “positive” estimates. The key factor is the sharp decline in the purchasing power of the population due to high interest rates. The civilian sector is in stagnation: companies are sending employees on unpaid leave en masse or switching them to part-time work, which has led to a sharp increase in hidden unemployment. One industry after another is turning to the authorities for support – from coal and railway industries to the automotive one.

The budget situation demonstrates a complete failure of financial planning. In July alone, the federal budget deficit reached one trillion rubles, while the plan for the entire year was 1.2 trillion. As a result, in a month and a half, the deficit grew from the approved 3.8 trillion to almost 5 trillion rubles. Such dynamics not only undermines macroeconomic stability but also creates additional inflationary pressure, which even the Central Bank openly warns about.

The situation is complicated by the fact that the economy is actually  divided into two parts. The military-industrial complex receives stable and generous funding, is not dependent on high interest rates and expensive loans, and lives off government contracts and advances. In contrast, the civilian sector – the main contributor to budget revenues – is forced to cut production and staff, further depleting the domestic market. As a result, the country’s resource base is being redistributed in favor of the war, while production of consumer goods is declining.