The author writes:

• “So far, the economic costs of the war (about $400 million per day) and the slow burden of sanctions have not appeared … disastrous for the Russian economy, but the first signs of increasing challenges in the financial system have emerged: The budget deficit has begun to gain momentum, tax collection has fallen and inflation has remained at double-digit levels. In the country’s ‘real sector’ of the economy, some industries have already felt the chilly effect of multiple sanctions, including: automotive (where production has declined by 85%), air transportation, steel, telecommunications, textile manufacturing, chemicals, and pharmaceuticals.”
• “Overall, the Russian economy is on track for a deep recession, even amid puzzling hints of temporary respite. While half a year of conflict has confirmed that sanctions per se cannot spark regime change or stop the war, they are undermining Moscow’s ability to wage a protracted, endless war. How long the military confrontation in Ukraine will last and what exit policy will be available will ultimately be determined on the battlefield and likely shaped through back-channel diplomacy. In the longer run Russia will cease to be the main supplier of hydrocarbons to Europe and will pay a high price for decoupling from advanced economies by accelerating its own technological backwardness.”

Read the full article on the PONARS Eurasia website.

This item is part of Russia Matters’ “Clues from Russian Views” series, in which we share what newsmakers in/from Russia are saying on Russia-related issues that impact key U.S. national interests so that RM readers can glean clues about their thinking.

The opinions expressed herein are solely those of the author. Photo by Gerd Fahrenhorst, shared under a CC BY 4.0 license.