While Russia continues to put on a show of resilience, signals across its economy are flashing red: inflation is rising, and labor and technology shortages are becoming acute. The most critical shortage, however, is budget financing, as Russia’s last liquid reserves are likely to run out in the fall of 2025.
STOCKHOLM – Russian President Vladimir Putin frequently boasts about the strength of his country’s economy, claiming that Western sanctions only made it stronger (while in the same breath demanding that they be lifted). In fact, “stagflation” – inflation combined with minimal growth – is coming to Russia. His war on Ukraine has caused both high and rising prices and labor shortages, because many workers have been mobilized or killed, while many others have fled the country.
STOCKHOLM – Russian President Vladimir Putin frequently boasts about the strength of his country’s economy, claiming that Western sanctions only made it stronger (while in the same breath demanding that they be lifted). In fact, “stagflation” – inflation combined with minimal growth – is coming to Russia. His war on Ukraine has caused both high and rising prices and labor shortages, because many workers have been mobilized or killed, while many others have fled the country.