Russia's economy is collapsing, dragging Belarus down with it – intelligence report

According to data from Ukraine’s Foreign Intelligence Service, the economic indicators of both aggressor countries have turned negative: the Russian economy contracted by 0.3%, and the Belarusian economy by 0.4%. The main cause of stagnation in Russia was the Central Bank’s tight monetary policy, which significantly raised the discount rate in an effort to combat inflation. 

This was reported by the SSU.

High interest rates led to a sharp rise in the cost of loans, which effectively stalled the development of industry and domestic production in Russia. For Belarus, the situation is complicated by its critical dependence on the Russian market, which threatens the country with stagflation—a simultaneous decline in production and a rapid rise in consumer prices. Intelligence analysts note that the cost of the food basket in Belarus has already nearly matched Polish levels.

The SWRU predicts that accumulated structural problems will prevent Russia from recovering quickly even if hostilities cease. For Belarus, the consequences could be even more severe due to the complete loss of economic independence. Currently, both states continue to feel the pressure of sanctions and isolation, which only deepens budget deficits.

Meanwhile, in Russia, production and sales of agricultural machinery have plummeted.

After three years of unexpected economic growth, Russia is facing a sudden slowdown—war costs, inflation, and falling oil prices have begun to weigh on an economy that until recently seemed resilient to sanctions.

Consumer lending in Russia has fallen to a six-year low.