The Russian economy suffered huge damage in August, says expert and journalist Andrei Gurkov in an interview with German public television ARD. The biggest problem is related to energy revenues - Ukraine has embarked on a new strategy in which it methodically attacks Russian refineries with drones, he points out. "The export routes of Russian gas and oil were also attacked - the port of Ust-Luga in the Baltic Sea, the "Druzhba" gas pipeline. Many factors have worsened Moscow's macroeconomic indicators in recent weeks."
Data on the Russian economy for the first half of the year show that it has slowed down significantly, Gurkov emphasizes. "Experts from state banks close to the Kremlin say that it seems that the Russian economy has already entered a recession", the journalist explains. Official data shows that the military economy continues to grow or at least is not in the red, but for the rest of the Russian economy, the opposite is true. According to Gurkov, this does not mean that the Kremlin is somehow planning to end the war because of financial problems. However, it is becoming more and more expensive for Moscow - this is precisely the purpose of the economic sanctions imposed by the West.
The biggest problem is extremely high inflation
The military economy has already taken over at the expense of the private sector, Andrei Gurkov believes. That is why in recent years many people have changed their jobs and started new ones in the military industry, where they earn more. However, the biggest problem of the Russian economy remains the extremely high inflation caused by the war, the expert believes. The leading interest rate until recently was 21 percent, now it is 18 percent. "No medium-sized business, let alone a small one, can afford such a thing," says Gurkov.
But it is not only the private sector that is suffering - the military economy is also working at the limit of its capabilities, the expert believes. "The materials are already worn out, but Western sanctions do not allow these machines to be replaced quickly. In practice, there is only one supplier - China, and it, of course, takes advantage of the situation in Russia and does not offer Russian buyers the cheapest options."
Putin must present victory
According to Gurkov, Russians today are feeling the impact of the war more strongly in their daily lives - mainly because of attacks on refineries, which lead to fuel shortages. "If this continues and the Ukrainians continue to attack refineries, there will undoubtedly be irritation among the people." However, the journalist adds: "But do not overestimate this possibility - there will be no rebellion against the war".
"Until 2014, Putin had an unwritten rule with the Russian people - we give you opportunities, and you do not interfere in politics", says Gurkov and explains that now it is different - after the illegal annexation of Crimea, the people were in euphoria and Putin decided that he could increase his popularity by giving the Russians new and new victories, as well as at least some stability. According to the journalist, there can no longer be any talk of stability, but this is no longer expected. Only victory is expected. "This is Putin's big problem. He needs to present some kind of victory to the people. People may line up at gas stations, but if Russia wins the war - everything will be forgiven. That's why Putin keeps undermining attempts to reach a truce," Gurkov commented.
"Winter will be very difficult for the Kremlin"
The Kremlin is already finding it difficult to continue the war under the current economic conditions, Andrei Gurkov believes. "Putin can no longer spend without limits, for example, on the insanely high bonuses that are paid to volunteers to go to war and then to their families, since volunteers often never return from the war," Gurkov notes. Of course, the Kremlin cannot afford to simply start printing money, because that will only increase inflation.
"I think the winter will be very difficult for the Kremlin and may affect the readiness for negotiations in the spring. The more painful the Ukrainian attacks not only on refineries, but also on the Russian economy as a whole, on Russian military plants, the faster this phase will be reached. But it hasn't gotten that far yet, says Gurkov.
According to the journalist, Trump is currently Putin's only hope - he hopes that the American president will help him and put pressure on Ukraine. Putin hopes that the Europeans will show weakness and stop making efforts. "This should not happen. Increasing the sanctions pressure now is a means of achieving a just end to the war. Not in the coming weeks or months, but in the perspective of a year," Gurkov believes.
However, Vladimir Putin continues to participate in economic forums - most recently in Vladivostok. According to Gurkov, this is important to maintain his image and to demonstrate that Russia is not in international isolation. And despite the close relations with China, which Putin constantly demonstrates, large investments - for example in the automotive industry - cannot be expected, the journalist believes. "There is great disappointment in Russia that China is not investing in the country, but rather flooding the market with its products."
Author: Eckart Aretz (ARD)