“Critical point”. Russian economy in an impasse. The Kremlin has only two options
The storm around the policy of the “peaceful” policy of Donald Trump and the confusion regarding negotiations in Istanbul diverted attention from the internal conditions of Russia – as if they had no influence on Putin's readiness or its lack of war. Although the Russians obey him, they begin to feel the economic situation in the country. However, is it hard enough to force him to negotiate?
To find the answer to this question, you need to assess the pace of deterioration of the situation and the mood of the “captains” of the Russian economy.
Currently, there is neither loss of control over the situation, nor a special confusion among the highest state managers. Putin's technocrats, of course, complain and lament, but They implement a plan that arose in their heads, when they understood that this year the war would cost more than in the previous one.
It is simple – it assumes a strong increase in interest rates, which is to stop inflation, stop the development of non -military industries and reduce the real expenses of society for private consumption. The funds withdrawn from the civil sector can be used in such a situation for military purposes. The Russians will not spend the “surplus” of their nominally increased income, but they will place them in state banks. Finally, the money accumulating on their accounts will take over the authorities – There will be no trace of the Russian savings.
Many things are currently going according to this plan. In recent months, the industrial index in military industries has been growing and civilian is decreasing. In addition, analysts close to the government said that “inflation has fallen sharply: now you can talk about it quite clearly and (almost) without reservations.” They did not hide their surprise with such a turn of cases.
Real consumer expenses (excluding seasonality) in March and April fell. This happened despite the rapid increase in nominal income (by 17.9 percent in the first quarter in terms of year on year). The Russians, however, did not spend “surplus” of money, only put them in banks, and the level of their savings in the first quarter reached a record value of 10 percent.
General expenses of the federal budget (whose main direction is directly or indirectly war) in the period from January to April increased by 21 percent. (in terms of year to year). There are many indications that the authorities will be able to achieve the declared destination of 8 percent in 2025. GDP (18 trillion rubles, PLN 847 billion) for military production.
Uncertain militarization
However, there is also the other side of the coin. The technocrat plan does not take into account many issues that citizens and authorities have to deal with.
In itself, an increase in military expenditure to $ 200 billion. (PLN 757 billion), which the Kremlin plans to do, seems to be a realistic goal. In the years 1960–1980 the share of such expenses in the USSR GDP also amounted to 8-10 percent. GDP. However, accompanying increased militarization of the civil society's belt is implemented according to the temporary and non -devotion of plan defects.
In fact, only pensions decrease, salaries are still growing. The highest bureaucratic circles hope to quickly put this end. – Most likely this year, literally in the next quarter, the salary increases race, which we observed in recent years, will end – said the main Russian economist Dmitry Biełousow.
However, these are only expectations – it is not known if the Kremlin will achieve this goal. And most importantly, the Russians now have much more money than it can offer the market for goods and services in the Russian Federation. All they have to do is panic and throw themselves to the banks to draw savings from them, and the market will break down. The detention of inflation depends not only on high interest rates, but also on the unexpected and rather short -term strengthening of the ruble and quite irrational and also temporary fluctuations in the purchasing activity of society.
Prices in Russia have ceased to rise not because of excess products. – technically complex goods of long -term use – such as gadgets, cars, electric equipment – you buy less. In addition, trade itself is struggling with debt -related problems, an increase in logistics costs and rental increases – said Dmitry Biełousow.
However, the Russians can change their minds and want to buy no less, and more of this type of products. The total sum of savings on the accounts of natural persons is approaching the amount of 60 trillion rubles (PLN 2.8 trillion) and grows rapidly. Only the payment of interest on deposits themselves is forecast for 9 trillion rubles (PLN 423 billion) – in 2024 it was 7 trillion rubles (PLN 329 billion).
Short -term victory over inflation
In fact, these deposits of dozens of billions of rubles are nothing but a military loan. The Russian economy is unlikely to be able to pay the Russians savings without their significant devaluation. The authorities are looking for a way to make it difficult to make access to this money to the Russians.
You do not need to freeze deposits. For example, you can transfer them to long -term securities and transfer settlements from them to the next authorities, if they will ever appear. The Russians, however, are not willing to voluntarily agree to the solutions invented for them, and the authorities are not yet ready to take forced resources.
That is why the authorities pretend to be generous. The immeasurable interest rate of deposits irritates financial managers, but the potential panic of depositors will inevitably cause a rapid increase in inflation and immediately destroy such a hardly won economic victory, which was announced by Russian analysts.
This victory is already put to the test by another problem – low oil prices. The authors of the updated version of the budget reduced the expected revenue from oil by 2.6 trillion of rubles (PLN 122 billion) – from 10.9 trillion to 8.3 trillion rubles (from PLN 512 billion to PLN 390 billion). Planned military expenses, however, increased by 0.8 trillion. Their cutting is currently prohibited in Russia.
Critical point
That's why they grow. In the period from January to April, they increased so quickly that the deficit reached 3.2 trillion. (PLN 12.1 trillion), exceeding the deficit from this period in every previous war year. Analysts estimate that in 2025 the revenues flowing into the Kremlin budget will be a few trillions lower and expenses higher than they assumed. The budget deficit in Russia can in this way increase to 5 trillion rubles (PLN 234 billion).
Until now, Putin's managers managed to maintain material and financial balance. The stability of the Russian economy, however, decreases and approaches the critical point. Most of his supporters would be satisfied with the truce. However, they are not the ones who make decisions.
Putin will certainly be able to continue the war if he wants. However, the moment of choice is approaching for his regime: Either look for peaceful respite or switch to the so -called mobilization model. If they choose the latter, the appeal to the members of the government will be simple – stop playing with savings, openly increase taxes, and maybe even assign employees to enterprises. I think that in 2025 the Kremlin would face such a choice.
