The Kremlin has introduced a policy aimed at increasing defense spending, while Russian society is experiencing problems with a labor shortage.
Russia has launched an information campaign aimed at creating the false impression that the Russian economy is doing well, despite serious macroeconomic problems associated with the war in Ukraine.
This was reported by analysts from the Institute for the Study of War (ISW) in their report.
According to analysts, on January 22, Vladimir Putin said that 2024 was a “strong” year for the Russian economy. He emphasized that the budget deficit was a manageable 1.7%, and non-oil and gas revenues grew by 26%, reaching 25.6 trillion rubles (about $257.9 billion). He also announced a 9.5% increase in military and insurance pensions in response to rising inflation.
Bloomberg reported that the Russian Finance Ministry released a report claiming that Russia's budget revenues in December 2024 reached a record high of more than 4 trillion rubles (approximately $40 billion), an increase of 28% compared to December 2023 and the highest level since 2011.
However, ISW analysts noted that the official figures do not reflect real economic problems, including excessive defense spending, high inflation, and a growing budget deficit.
Russian society also faces labor shortages, demographic problems, and a shrinking savings.
Recall that Podolyak predicts “quick consequences” in the event of a significant destruction of the Russian economy and a significant increase in panic in social moods.
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