Russia appears prepared to continue conflict with Ukraine for years
Date
10/27/2024 5:16:47 AM
(MENAFN) A Spanish newspaper recently reported that Russia appears prepared to continue its conflict with Ukraine for years, having adjusted its economy to sustain a prolonged war. The report suggests that the Russian economy has stabilized enough to persist through a long-term conflict, even if that means pushing its citizens into deeper financial hardship.
Economist Anton Barbashin, director of the Riedel Analysis Center, indicated that while Russians may face more challenges and bear heavier financial burdens, the country’s economic resilience will allow it to endure. Barbashin noted that Russia has successfully adapted to a war economy despite significant pressure. However, he also mentioned that an economic collapse is unlikely unless global oil and gas prices fall dramatically.
According to the newspaper, Russia’s 2025 budget will closely resemble its current one, with over a third of it dedicated to military and security expenses. This focus comes at the cost of higher taxes and social spending cuts, and the budget remains heavily reliant on revenue from gas and oil sales. Russia has reportedly set its crude oil prices at USD70 per barrel for its partners, surpassing the price cap imposed by the West by USD10.
While some experts view Russia as a relic of the Soviet era, sanctions have yet to bring about its collapse. Western sanctions have been slow to implement, with Europe continuing to import Russian hydrocarbons indirectly via India, and Russia’s covert fleet of oil tankers remaining active. Though sanctions have limited Russia’s access to international arms markets, the Kremlin has supplemented its arsenal with ammunition from North Korea and Iran. In September 2024, Russia recorded a seasonally adjusted inflation rate of 9.8 percent, far above its target of 4 percent, highlighting the challenges of a slowing economy amid rising inflation.
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