Russia's Central Bank continues to use an economic facade to present the country as stable while in reality implementing policies that are likely to deepen economic instability. This is what the Institute for the Study of War (ISW) warns in a report, quoted by News.bg.
According to the analysis, unsustainably high payments to the military and the resulting labor shortage are further undermining the country's economic resilience. Despite the Kremlin's efforts to demonstrate stability, the consequences of the prolonged military conflict are being felt tangibly in the economy.
The labor shortage in both the civilian and defense sectors is hampering economic growth, defense industry production, and the creation of new armed forces. This discrepancy between official statistics and real economic processes calls into question the reliability of the Central Bank's data.
ISW emphasizes that Russia is not able to sustain prolonged hostilities without forced mobilization, which President Vladimir Putin continues to oppose. Also, the Russian economy can hardly withstand the ever-increasing costs of recruiting new recruits.
At the same time, Russian bankers privately express concern about the growing number of non-performing loans. A problem that contradicts the Central Bank's assurances of stability. According to Bloomberg, three of Russia's systemically important lenders may face the need to recover significant amounts lost due to bad loans. In 2025 These loans grew by 1.2%, and are expected to reach 6-7%.
While ISW could not independently confirm Bloomberg’s report, it notes growing concerns among Russian authorities about financial stability. Elvira Nabiullina, the head of the Russian Central Bank, has downplayed the risks of a systemic crisis, citing capital reserves of about eight trillion rubles (approximately $102.5 billion).
Meanwhile, tensions are also rising on the front lines. On the night of July 16-17, Ukrainian forces launched strikes on Moscow City and St. Petersburg, part of an ongoing Ukrainian campaign to weaken Russia's defense-industrial base.
On July 17, Russia and Ukraine carried out another exchange of bodies of killed servicemen in accordance with the agreements reached in Istanbul on June 2.
On the domestic political level in Ukraine, the Verkhovna Rada approved the appointment of former Economy Minister Yulia Sviridenko as the new prime minister. President Volodymyr Zelensky appointed former Justice Minister Olga Stefanishina as special representative to the United States.
On the front line, Ukrainian forces made progress in the Pokrovsk region, while Russian forces advanced near Borova.