The Russian Economy at War (2024) - Sanctions, growth, inflation & mounting risks
The Russian Economy at War (2024) - Sanctions, growth, inflation & mounting risks
Since 2022, there have been wildly divergent predictions made about the way the Russian economy would hold up under pressure.
Now, deep into Q3 2024 I want to have a closer look at the Russian economy, sanctions, and the risks it faces. And for a change in perspective, we will do it primarily using Russian data.
TL;DW
Stuff we knew already:
The Russian economy is running very hard to stay in the same place.
Natural gas is in the toilet, oil is fine.
Electronics have been making their way into Russia just fine, despite sanctions.
Secondary financial sanctions - or the threat thereof - are making their life difficult in China. A going rate of 6% of the transaction for financial intermediaries is mentioned.
Stuff that's new to me:
Their defense budget increase has actually been beaten (proportionally, based on Rostec numbers) by Poland during the period of the war. This could be because they're lying about how much they spent, because they're just that cash strapped, or because refurbishing old equipment stocks is cheaper than building new stuff.
Russia is increasingly not even publishing the cooked statistics, because sometimes you can play them off of each other and actually learn things.
"Until you go out of business, you don't have problems, you have costs" - Pretty much the "in a nutshell" of whether sanctions can stop the war. No, but they can definitely make them lose (run out of money and/or regime support) faster, and that's happening to some degree. The question is still who can spend longer, between them and Ukraine+the West.
"Russia is currently in the process of expending both it's past and it's future" - A pretty raw quote. They're rebuilding their economy, again to a degree, around strip mining the Soviet Union, at the expense of actual industry that will keep them fed in the long term.
If you aren’t familiar with Perun, he became notable early in the war by analyzing the russian attacks by vehicle type see and destroyed, frustrated in people saying the russians didn’t send their bast when the data said they did. He has a great head for military economics.