This explains why Russia is kidnapping Ukrainian children. Russia's economy faces a demographic disaster and risks seeing its population reduced by half by the end of this century https://www.businessinsider.com/rus...er-shortage-growth-outlook-ukraine-war-2024-8
The Russian economic facade is crumbling. There is only so long that massive borrowing to spend on military equipment amid declining oil & gas revenues can keep the Russian economy afloat. Russia War Economy Set for Sharp Slowdown After Second Quarter https://www.bloomberg.com/news/arti...es-for-war-driven-economy-to-run-out-of-steam Growth is likely to halve in second half of year, analysts say Huge government defense spending helped drive wartime growth Russia’s overheating economy fueled by massive Kremlin spending on its invasion of Ukraine may be about to cool sharply amid mounting constraints on key sectors that have bolstered growth until now. Labor resources are practically exhausted amid fierce competition for recruits between the military and businesses that’s also likely to limit further expansion of defense-related industries. The construction and banking sectors are no longer shielded from the impact of very high interest rates now that most state-subsidized mortgage programs were wound up last month. The construction and banking sectors are no longer shielded from the impact of very high interest rates now that most state-subsidised mortgage programmes were wound up in July. While gross domestic product (GDP) is seen jumping more than 4 per cent annually in the second quarter, growth is likely to slow to half that level over the rest of the year, according to economists surveyed by Bloomberg. The Federal Statistics Service will publish its preliminary reading for the second quarter GDP later on Friday. The estimate is set to show a “last growth spurt before Russia’s economy starts to markedly cool”, said Russia economist Alex Isakov from Bloomberg Economics. He said he expects Russia’s growth to slow to around 2 per cent in the second half of the year, and reach 0.5 per cent to 1.5 per cent in 2025. The government massively increased spending in the wake of the February 2022 invasion, pouring money into the military and defence industries and acting to cushion domestic businesses against the impact of sanctions imposed by the US and European Union. That caused the economy to overheat to a degree unseen since before the 2008 global financial crisis, according to Bank of Russia Governor Elvira Nabiullina, in response to the huge surge in domestic demand. “Reserves of labour and production capacity are almost exhausted,” Ms Nabiullina said. The central bank in July hiked the key interest rate by 200 basis points to 18 per cent – the highest since the early weeks of the war – to counter risks of stagflation as price growth continued to accelerate. Unemployment, a key sign of overheating, has declined to a historical low in Russia of 2.4 per cent, and below that of any of the Group of Seven states. Businesses now have a shortage of more than 2 million workers, according to the Federal Statistics Service. The Bank of Russia shut down its own fleet of armoured cash-collection vehicles because so many of the employees had switched to working in defence factories, the RBC news sited reported on Aug 8. Demands from the military for new recruits to join the war continue to add to labour pressures, particularly as government officials are sharply increasing recruitment bonuses for new volunteers to replenish the army’s ranks. Economic activity in June showed signs of cooling across most sectors with construction growth at the lowest level for that period since 2020, according to the Economy Ministry. Expansion in manufacturing driven by military orders was half the level in June compared with May’s. Wholesale trade including energy sales slowed to less than 2 per cent growth from double-digits in previous months, the Economy Ministry data show. Policymakers are hoping the signs of a slowdown in June and July indicate a cooling in domestic demand, according to minutes from the Bank of Russia’s last rate-setting meeting. Another explanation – increasingly severe limits on production capacities – would indicate that inflationary pressures remain elevated despite the bank’s efforts to curb them. The June data could be a one-off, making it too early to tell if the slowdown has started, said Oxford Economics economist Tatiana Orlova. Growth should ease in the second half of 2024 after the monetary tightening and the end of a popular mortgage subsidy programme, which is likely to hit construction, she said. Capital investment in Russia remains high, potentially testing the boundaries of economic growth in the longer term, according to central bank forecasts. Sanctions have prompted investment in domestic production of aircraft parts, equipment, electronics and components in response to demand, said local procurement platform TenderPro LLC director Ildar Mukhamediyev. “Companies in Russia are not reducing their investment activity,” he said, citing a survey by his company that showed a 70 per cent jump in the number of capital projects started in the first seven months of 2024 compared with the same period in 2023. Capital investment is only part of the long-term growth story, according to Ms Orlova. Labour and technology constraints may be harder to solve as Russia’s war grinds through a third year. “Russia’s growth potential is hampered by several problems, such as low population growth, high unit labour costs and a very poor investment climate,” she said.
In-depth article with numerous charts. Why Putin’s inflation battle is weakening Russia from within Spiralling price pressures have forced the president to turn people into the ‘the new oil’ https://www.telegraph.co.uk/busines...n-hiking-taxes-fight-russia-inflation-crisis/
Russian banks have to pay a high price to get Yuan because nearly all Chinese banks will not do business with them. This is a complete disaster for the Russian banking sector. Russian Banks Scramble for Yuan as Liquidity Shortfall Doubles New US sanctions spooked Chinese banks, deepening the shortage Local firms are filling the gap with costly central bank swaps https://www.bloomberg.com/news/arti...amble-for-yuan-as-liquidity-shortfall-doubles Over 98% of Chinese banks do not accept direct payments from Russia https://www.pravda.com.ua/eng/news/2024/08/12/7470037/
https://www.atlanticcouncil.org/con...hout-russians-putins-disastrous-demographics/ A Russia without Russians? Putin’s disastrous demographics
Hey! Wasn't Russia supposed to be completely broken up by now? Coulda sworn that prediction (and other hilarities in this thread by those who posted) were supposed to have happened by now.
https://finance.yahoo.com/news/economic-catastrophe-lurking-beneath-russia-183542292.html An economic catastrophe is lurking beneath Russia’s GDP growth as Putin ‘throws everything into the fireplace’
If I did, you'd still be here calling for Russia to go bankrupt, telling us "any day now"! Besides, if I wanted fascism, I could stay right here as shit goes that direction.