russia’s “War Economy” Has Exhausted Its Resources

russia’s economy has begun to decline after a period of artificial stimulation by government spending. Minister of finance Anton Siluanov has acknowledged that budgetary support cannot continue indefinitely and will inevitably lead to imbalances. This effectively means abandoning the concept of the so-called “war economy”, which was actively promoted by the propaganda media just a year ago.

At that time, official reports were full of information about record workloads for defense sector enterprises, growth in profits and salaries. It was the military-industrial complex that was presented as the “locomotive” of the economy. Today, it has become a burden: in the first nine months of this year, growth rates were only 0.3 % compared to 5 % last year. This has affected corporate revenues and wage levels.

The kremlin has set a target of 1 % GDP growth in 2025, but russian economists are increasingly talking about stagnation and recession.

Signals from different sectors confirm that russia’s economic momentum is weakening, while the outlook points not to recovery but to further deterioration.