The Guardian: Russia Is Going Through Its Toughest Period Since The Start Of The War

Two-thirds of the country's Sovereign Wealth Fund has already been exhausted.

US President Donald Trump said this week that Russia's economy is on the verge of collapse and Ukraine has a chance to regain its territories, writes The Guardian (translated by Charter97.org).

Yes, Russia is going through its worst period since the invasion began. The Kremlin's priority is still military spending, although its growth is exacerbating the budget gap. The January-July deficit has already exceeded targets, and by 2026 it is projected to be about 4.6 trillion rubles. Two-thirds of the National Welfare Fund is actually exhausted.

To replenish the treasury, the authorities are raising VAT from 20% to 22%. Now Russians are directly financing the war, which takes about 40% of the budget. At the same time, the GDP growth forecast has been lowered to less than 1%. The head of Sberbank German Gref admitted that the country has entered "technical stagnation".

The first two years of the war, the economy grew at the expense of military production - record employment, rising wages in the regions. But this "war boom" proved short-lived. Economists note that Moscow will not be able to increase military spending by 30% annually.

Because of international sanctions, Russia has had to reorient its exports to China, India and Turkey, using a "shadow fleet" of tankers and parallel imports through intermediaries in Turkey, the UAE and the former Soviet Union.

At the same time, Ukrainian drone strikes on oil refineries have caused serious fuel disruptions. Since August, 16 out of 38 refineries have been damaged, diesel prices have risen, and lines at gas stations have reached Moscow.

The main question remains the same: Will Putin's economic difficulties force him to change his plans in Ukraine?

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