Since the end of 2024, the annual growth rate of the Russian economy has decreased by about 5% to almost zero. The central bank and the government are careful that demand is falling, and production slows down.
Over the past three years, the Russian economy has exceeded almost all forecasts from a combination of financial growth, high prices for raw materials and militarization of the economy, the economist writes.
The first explanation of a sudden slowdown is what the Central Library of Russia calls the “structural transformation” of the economy. Earlier, the country was oriented to the West and allowed private entrepreneurship, since 2022 it became a military economy directed to the east. This required huge investments – not only in the production of weapons, but also in the creation of new supply chains.
Meanwhile, military expenses slowed down: +53% (2023) to +3.4% (2024).
The second factor is a monetary policy. Inflation exceeds 10%, and the key indicator-21%is the high high since the 2000s.
The third factor is a deterioration in external conditions. Oil prices are falling, especially from the dependence of the Russian Federation on the export of energy. China – the main buyer of oil – slows down growth (expectations for 2025: from 4.6% to 4%). MoEx (stock index) fell by 10%, tax revenues from oil and gas – by 17% (March).
The budget is already experiencing pressure: in March, tax revenues from oil and gas fell by 17% in annual.
Donald Trump can be positively connected with Putin, but he “hit him only in his teeth” with his trade war, the publication says.
Source: Racurs
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