But the speed of economic change in Russia is increasing
Absolutely, that’s been pretty clear for the past few months. The Russian economy was surprisingly resilient early on, but they are running out of tricks, and pouring money into the economy used to work, but now it will only make it worse.
Kremlin is blaming Western activities and sanctions for economic issues in Russia,
So the tone has taken a 180, they used to say that Russia would be fine without the West, and it would only hurt us more than it would hurt them.
Well look who is whining now!
Their banks are doing nothing short of magic but afaik they now burned through most of their cash reserves, so things could get bad fairly quickly. I’m not sure what they even can do at this point, and their long term prospect is even worse with all the brain drain and the loss of so many men.
That was the expectation I’ve seen. Russia was estimated to have 3 years of reserve. Year 4 is the turning point. From what’s in the news, the estimate was not far from the mark and things can get weird next year.
That would have been a very optimistic estimate 2-3 years ago. The reserves were supposed to hold much longer, like 10-20 years of embargo against Russia, But a lot of foreign currency has been frozen in western banks. The value of their gas and oil has been hit by Europe importing way less than we used to, and oil having embargo with a price ceiling mandated by EU.
The sanctions hit harder as Russian stock runs dry, and they can’t replace it with Russian products. First because they already produce at capacity, second because they sometimes lack the know how.
The Russian government has run at enormous deficits, and that’s despite mandating low prices from weapon producers. Something they used to be able to recoup with exports. But exports are halted now, because Russia needs it all.
So major industries are running at huge deficits, like the gas and oil companies and the military industrial complex. But the problems are even more widespread than that, because the high interest rate, makes it near impossible to invest in expanding production, and hard to even just maintain current production levels.
Inflation is estimated at just above 8%, but Russia has already had to emergency import eggs, butter prices are up 30% and potatoes are up 70%!
Next year there will be shortage of sugar, because they can’t import seeds from Europe.
So even if they still had emergency funds to pull from, a lot of these problems can’t be solved by throwing money at the problem.
Absolutely, that’s been pretty clear for the past few months. The Russian economy was surprisingly resilient early on, but they are running out of tricks, and pouring money into the economy used to work, but now it will only make it worse.
So the tone has taken a 180, they used to say that Russia would be fine without the West, and it would only hurt us more than it would hurt them.
Well look who is whining now!
Their banks are doing nothing short of magic but afaik they now burned through most of their cash reserves, so things could get bad fairly quickly. I’m not sure what they even can do at this point, and their long term prospect is even worse with all the brain drain and the loss of so many men.
That was the expectation I’ve seen. Russia was estimated to have 3 years of reserve. Year 4 is the turning point. From what’s in the news, the estimate was not far from the mark and things can get weird next year.
That would have been a very optimistic estimate 2-3 years ago. The reserves were supposed to hold much longer, like 10-20 years of embargo against Russia, But a lot of foreign currency has been frozen in western banks. The value of their gas and oil has been hit by Europe importing way less than we used to, and oil having embargo with a price ceiling mandated by EU.
The sanctions hit harder as Russian stock runs dry, and they can’t replace it with Russian products. First because they already produce at capacity, second because they sometimes lack the know how.
The Russian government has run at enormous deficits, and that’s despite mandating low prices from weapon producers. Something they used to be able to recoup with exports. But exports are halted now, because Russia needs it all.
So major industries are running at huge deficits, like the gas and oil companies and the military industrial complex. But the problems are even more widespread than that, because the high interest rate, makes it near impossible to invest in expanding production, and hard to even just maintain current production levels.
Inflation is estimated at just above 8%, but Russia has already had to emergency import eggs, butter prices are up 30% and potatoes are up 70%!
Next year there will be shortage of sugar, because they can’t import seeds from Europe.
So even if they still had emergency funds to pull from, a lot of these problems can’t be solved by throwing money at the problem.