The Russian economy has stalled. Oil revenues have fallen. The budget deficit has risen to its highest in three decades. Inflation and interest rates remain painfully high. This is what the article says Bloomberg.
After a significant increase in military spending, data about which is being concealed by the Kremlin, Russian ministers, bankers, and economists are publicly warning that their economy is in deep crisis.
Military and national security spending will cost the Kremlin nearly $172 billion this year, said Oleksandra Prokopenko, a fellow at the Carnegie Endowment for International Peace.
There are other similar estimates, but Prokopenko's figure is about 8% of GDP.
As Bloomberg reports, behind the walls of the country's banks, some insiders are sounding the alarm about an approaching debt crisis.
In addition to a potential banking crisis, there is a drop in Russian oil revenues. Even Trump's meeting with Putin in Alaska was arranged amid the threat of new US sanctions on oil supplies.
According to Bloomberg, Putin repeated his request for sanctions to be lifted as part of any deal with the US.
The ongoing war puts banks at risk of bankruptcy, and therefore the Russian state budget, especially if additional sanctions are imposed.
However, even with a long-term ceasefire, Russia may face the problem of demilitarizing an economy that has become dependent on war, which could trigger bankruptcies among heavily indebted contractors, which could spread to the entire economy.
According to the publication, Trump told European partners that Putin agreed to the meeting because of the threat of secondary sanctions, in particular, regarding India's purchases of Russian oil.
