The Russian economy is in crisis, but this is being concealed, according to an expert
23 March 18:55
Russia’s federal budget deficit is growing rapidly and has already approached 3.5 trillion rubles in the first two months of the year, while it could exceed 10 trillion by year-end. At the same time, the country’s actual financial situation is significantly worse than official statistics indicate. Economist Andrey Novak stated this in an interview with the YouTube channel "Komersant Ukrainian".
“Russia has entered an economic crisis, but they are skillfully, as always, covering up the real situation. They are covering it up with statistical data that has long since had nothing to do with their economic realities,” he noted.
According to the economist, because a significant portion of military spending is classified, official figures do not reflect the true scale of the problems.
Novak emphasized that the actual budget deficit of the Russian Federation is significantly larger than what is publicly stated.
“To calculate the actual Russian budget deficit, you need to add another third to their expenditure side. That’s what the real figures will be. This includes everything related to the war and the processes surrounding it,” Novak explained.
An additional source of pressure, he said, is the limited nature of reserves. Formally, there are still funds in the National Welfare Fund, but their liquidity is in doubt. Moreover, Russia is already facing difficulties even in selling gold from its reserves.
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In this situation, the expert notes, the Russian authorities have only a few options left for financing the war—and all of them carry additional risks for the economy.
“Right now, they are essentially resorting to seizing Russians’ bank deposits. That’s the first option. The second is to turn on the printing press. And the third is to let the Russian ruble float freely,” he said.
Novak also noted that even the financing of key military needs is already deteriorating.
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By all indications, Russia is gradually losing its ability to maintain war spending at previous levels.
“In other words, they can no longer finance war expenses at last year’s level, let alone at the level of two or three years ago. They are gradually running out of resources,” the economist concluded.
