putin is in a painful economic bind – The Economist
putin is in a difficult economic situation, according to The Economist.
The main points of the article:
▫️ russia’s central bank recently raised its key interest rate to 21%, the highest level in 20 years, and markets predict it will rise to 23% by the end of the year.
▫️ This indicates future economic difficulties for russia.
▫️ Annual spending on defense and security is expected to rise to 17 trillion rubles ($170 billion), accounting for more than 40% of all government spending, or 8% of russia’s GDP.
▫️ The russian economy shows all the characteristic signs of overheating, with annual inflation exceeding 8%.
▫️ This year, the number of corporate bankruptcies has increased by 20%.
▫️ The IMF expects russia’s economic growth to slow sharply to 1.3% next year.
▫️ The need to maintain the value of the ruble to pay for critical imports is a vulnerability for putin that could affect his ability to wage war.
At the same time, as the Center recently reported, the russian ruble exchange rate broke the psychological mark of 100 rubles to the dollar for the first time in a year.
This indicates that moscow’s bloody military machine is not only depleting the country’s resources but is also leading Russia to an economic crisis that will only deepen with continued aggression.
