The Russian -Ukrainian war enters its fourth year, although this time is amid talk about the approaching peace negotiations to stop it, as the Riyadh meeting last week between the Russian and American delegations formed a whistle for its launch.
And isolated from any subsequent scenarios on this line, Russia is working in this atmosphere to strengthen its negotiating positions through military and diplomatic efforts, but nevertheless, the economic front remains the most important to contain any internal imbalances.
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Russia became the most sanctions country in history, after it fired on February 23, 2022, what it called the Special Military Operation in Ukraine, the West did not hesitate to respond quickly and impose widespread sanctions on Moscow.
These sanctions included imposing restrictions on the Russian financial sector and on the central bank and removing Russia from Swift transactions between banks, and also imposed new bases on goods and services in the strategic sectors of the Russian economy such as energy, aviation, shipping and others.
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The pressure also affected a wide circle of individuals, including those close to Russian President Vladimir Putin, in addition to military institutions, such as the “Wagner” group, and Russian businessmen have origins in Western countries and the Western circles consider that they are linked to the Kremlin.
Although the Russian economy showed flexibility during the three years of the war in Ukraine and Western sanctions, as Russian and even Western observers confirm, the approaching war in its fourth year puts the economy to major challenges if it does not stop.
At a time when Russian experts admit that there are effective repercussions of the war on the economic conditions inside the country, they almost unanimously prevail that the state’s policies succeeded, however, in his failure to reach a state of collapse, even recovery in many stages and sectors, and that the decrease in economic activity It was less than expected.
The end of the war
In the opinion of the researcher at the Supreme Institute of Economics, Vladimir Olichinko, the Russian economy may disappoint in 2025 if a diplomatic solution to the conflict with Ukraine is not reached.
In an interview with Al -Jazeera Net, he refers to the main challenges facing the Russian economy during the current year, namely:
- Annual inflation, which reached 9.5% in 2024, driven by the high military and security spending, which is expected to represent 41% of the total state budget spending in 2025.
- State subsidies decline on loans.
- The growth of escalating wages amid the lack of employment.
According to him, the penalties caused the problem of lacking local suppliers who are able to replace the equipment, materials and imported components that are not available, which in turn became one of the main problems facing the Russian industry, as it is clear from the survey conducted by the Economic Prediction Institute of the Russian Academy of Science and showed that 53% of companies It suffers from the lack of alternative suppliers in Russia.
However, it confirms that the Russian economy has better adapted sanctions than officials and experts expected at the beginning of the crisis, and although widespread restrictions were not free of “pain”, but nevertheless there was no economic collapse.
As he says, the Russian economy – despite the previous data – witnessed growth in the gross domestic product and investment as well as in the sizes of exports and imports, despite restrictions on the financial sector, the stock market, exports, imports and international reserves, and despite the departure of international companies in large numbers and the interruption of supply chains.
The collapse did not happen
For his part, the macroeconomic issues, Igor Blanderkin, believes that some of the decisions taken by the Central Bank, such as combating inflation by raising interest rates, led to a profitable margin of no more than 20% in most sectors, as well as to decline in investment.
Al -Jazeera Net indicates that the high prices increase the risk of companies ’bankruptcy, especially in the weak sectors such as real estate, which were affected by the measures aimed at slowing the lending, including stopping the support of government housing loans.
He adds that opinion polls indicate that inflation has become a list of economic problems, as the prices of basic foodstuffs such as butter, eggs and vegetables showed a double increase in the year 2024, which affected the entry of the most vulnerable groups, with real retirement pensions decreased by 0.7% during the past year 2024 .
At the same time, the spokesman confirms that the Russian economy has shown “tolerance miracles” and showed the ability to adapt to new challenges.
This is evidenced by saying that despite the crisis, Russia has succeeded in avoiding financial chaos, and has maintained the flow of oil and gas revenues to the economy, which although it decreased to 5%, this is less than what was the case during the Corona epidemic crisis.
This explains that Moscow has moved a high dynamism and took measures to redirect its economy towards cooperation with friendly countries, building alternative logistical and productive chains, removing the dollar from the economy and turning towards the use of rubles and “friendly currencies” as a major way to pay.
He concludes that the lessons learned from sanctions require Russia not only to redirect itself to other regions, but to restructure all aspects of the economy, otherwise it will live according to the rules of those who impose sanctions and fight the fragmentation of the global financial system- as he put it.
