How long will the Russian economy last – FREEDOM analysis

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Without any embarrassment, Vladimir Putin announced to the Russians the complete restoration of the Russian economy. They say, “Russia has overtaken Germany and is one of the five largest economies in the world. Everything in the country is stable, and in some indicators even better than expected.” Putin, according to Russian sociologists, is trusted by 76% of Russians. However, the current situation at gas stations, stores and even pharmacies causes slight bewilderment among the Russian average person, FREEDOM reports.

At the end of the week, on September 21, the head of the Russian government, Mishustin, signed two key resolutions at once. The first is a temporary ban on the export of gasoline and diesel fuel from the country. The second is about the introduction of export duties linked to the ruble exchange rate. The reason is that regions of the Russian Federation began to massively complain about empty gas stations (gas stations). Not only have popular brands of gasoline disappeared (despite the fact that its price has broken the Russian historical maximum – 70 rubles per liter A-95), diesel has also disappeared from the market. And this is in the midst of the harvesting campaign.

Various reasons were given for the “temporary difficulties”: from “gray” exports to “traffic jams” in the southern regions. Allegedly, Russians went on holiday in such large numbers during the holiday season that they paralyzed the railway. In more than a month, neither the Federal Antimonopoly Service nor the Ministry of Energy of the Russian Federation could cope with the problem. As a result, they decided to ban exports and raise duties – and that’s what they did. Moreover, duties on gasoline, for example, were raised from $6 per ton to $250.

The head of Gazprom Neft, Alexander Dyukov, has “so-so” expectations from the measures taken.

“A protective duty on petroleum products in the short term can lead to a surplus of fuel and a decrease in domestic prices. But due to a sharp increase in the duty, the efficiency of oil refineries in Russia will decrease and, accordingly, the volume of oil refining will decrease. As a result, this could lead to a fuel shortage,” said the head of Gazprom Neft, Alexander Dyukov, on the sidelines of the Industrial and Energy Forum in Tyumen.

Due to problems with sales of raw materials, Gazprom Neft is rapidly losing income. Since the beginning of 2023, the company’s net profit has fallen by 43%. As Reuters writes, this indicates deep problems in the Russian economy. A strengthening of the ruble could somewhat reduce the tension on the Russian fuel market. But the prospects are vague. The exchange rate stubbornly remains at almost 100 rubles per dollar. Although Russians still remember very well when the dollar was 60.

Meanwhile, the head of Ukrainian military intelligence, Kirill Budanov, predicts that the Russian economy will last until 2025. In an interview with The Economist magazine, he also noted that the flow of weapons will dry up in 2026. And he added: “perhaps earlier.”

“Human resources in Russia, relatively speaking, are limitless. The quality is low, but the quantity is sufficient. As for other components of military operations, Russian resources are depleted, and a reckoning is coming,” said Kirill Budanov, head of the Main Intelligence Directorate of the Ukrainian Ministry of Defense, in an interview with The Economist.

Analysts, citing Rosstat data, calculated which goods and services have risen in price the most in the country. We took prices for June of this year and last:

  • in the first place are trips to the countries of Central Asia, which have risen in price by almost half;
  • in second place – the popular drug “No-shpa”, which has risen in price by 40%;
  • third and fourth places are coffins and cremation.

Also among the ten goods and services that have become most expensive in Russia are:

  • car insurance;
  • smartphones;
  • budget flights;
  • rental of bank safes;
  • ordinary school notebooks (this is in a country where forest is one of the main resources);
  • holiday in Turkey, which closes the top ten.

Previously, Candidate of Historical Sciences, professor at the University of Prague, military expert Yuri Fedorov believes that the Russian economy is weakening, but the economic weakness of the Russian Federation should not be exaggerated. Putin may have enough money to continue the war for several years, and the majority of the Russian population is prepared for a deterioration in living standards. In this situation, it is important to deprive the Kremlin of the opportunity to acquire weapons and components for their production.

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