Kathrine Frich
Across Russia, factories are slowing, prices are soaring, and state finances are tightening.
Analysts warn that the country’s economy is entering a critical phase that could determine its future alignment on the global stage.
Shrinking industry
According to Andriy Kovalenko, head of Ukraine’s Center for Countering Disinformation under the National Security and Defense Council, Russia’s industrial production has fallen sharply.
He reported that tank, armored vehicle, and metal manufacturing declined between six and twenty percent in September.
Kovalenko wrote that even official statistics show a grim picture.
Russia’s federal agency Rosstat reports that GDP growth has stalled, budget income has dropped by twenty-one percent, and the national deficit is now five times greater than expected.
Tax rises and public strain
From January 1, the Kremlin plans to increase value-added tax to twenty-two percent and cancel tax exemptions for small businesses.
Ukrainian media note that this will remove financial stability from Russia’s middle class, channeling funds toward military spending.
Food prices have already risen by thirty percent for poultry and pork. Business closures are spreading across the country as President Vladimir Putin and Security Council Secretary Nikolai Patrushev face growing difficulty managing markets and basic supplies.
Energy losses and sanctions
Energy firm Gazprom has passed its losses on to consumers, while the Finance Ministry is cutting public spending.
According to reports from Ukrainian and Baltic media, new United States sanctions against Rosneft and Lukoil have blocked Russia’s access to the Indian oil market.
China remains Moscow’s largest buyer, but its role is limited.
On October 30, United States President Donald Trump and Chinese President Xi Jinping are expected to meet in Busan to discuss Russia’s economic future without inviting any Russian representatives.
A single remaining path
Analysts cited by the Ukrainian National Security and Defense Council argue that when a warring state can no longer sustain its defense production, the result is not just recession but full financial collapse.
Kovalenko stated that to avoid becoming dependent on China, Russia has only one remaining option: to stop the war and stabilize its economy.
Sources: LA.LV, Ukrainian National Security and Defense Council
This article is made and published by Kathrine Frich, who may have used AI in the preparation
