The Warning Signs for Russia's Economy Are Flashing Red
A slowdown exposes the limits of the country's wartime economy and suggests sanctions may finally be taking a toll
The Warning Signs for Russia's Economy Are Flashing Red - WSJ
https://www.wsj.com/world/russia/the-warning-signs-for-russias-economy-are-flashing-red-ff1658bdAI Overview
"There are differing views on whether Russia's economy is stalling or experiencing a slowdown.
Evidence pointing to a slowdown or stagnation:
Growth deceleration: While Russia's economy saw some growth in 2024, driven by military spending, recent indicators suggest a slowdown, according to a FocusEconomics report.
High inflation: Russia is experiencing high inflation, reaching 9.9% in May 2025, which is well above the central bank's target and can erode purchasing power. The central bank has resorted to increasing interest rates to tackle this, but this also increases borrowing costs for companies.
Labor shortages: Shortages of workers, partly due to the war in Ukraine and emigration, have driven up wages and contributed to inflation, according to Yahoo Finance.
Declining energy revenues: Sanctions and weaker global prices have led to a decrease in Russia's oil and gas revenues, impacting the government's budget.
Conclusion:
While Russia's economy has demonstrated some resilience and even growth in recent years, largely driven by wartime spending and a shift in economic focus, there are increasing signs of a slowdown. High inflation, labor shortages, and potential fiscal pressures are significant challenges. The long-term sustainability of the current growth model is questionable, particularly given restrictions on technology access and potential further impacts of sanctions."*
*There are counterarguments. I just posted the ones that made me tingly all over.
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