John Tefft
Russian President Vladimir Putin has sought from the very start of his “special military operation” in Ukraine to prevent the conflict from intruding into the lives of Russian citizens, particularly those who live in Moscow and St. Petersburg. As the war enters its fifth year, this effort is increasingly failing.
Ukraine is attacking military facilities and refineries around Russia, causing significant damage and producing shortages in gasoline. Western sanctions are biting harder into the fragile Russian economy. Along with huge expenditures on the military (which now receives 8 percent of GDP), sanctions are restricting the flow of long-term capital for the civilian economy. Russia's energy revenues dropped by about a fifth in 2025. Fiscal problems are growing, and the country may be on the verge of a serious recession. The budget deficit in 2025 was 2.5 percent of GDP, five times higher than was predicted at the beginning of the year. To raise revenue, VAT taxes have been raised, and a “technological fee” will be assessed on imported electronics and household appliances.
No comments:
Post a Comment