Russian financial experts warned Putin that the war would lead to economic collapse — Bloomberg

Anton Siluanov, the finance minister of the aggressor country, and senior officials at the Central Bank of the Russian Federation have issued serious warnings to Putin regarding the critical strain on the state budget. Economic officials emphasize that the current level of funding for the war against Ukraine poses real risks of an uncontrolled rise in the deficit and the overall collapse of the country’s financial system. 

This is reported by Bloomberg.

Representatives of the Ministry of Finance and the Central Bank of the Russian Federation insist on immediate optimization and partial cuts to defense spending, as without these steps, it will be impossible to maintain the stability of the ruble and the state budget. According to analytical data, the Russian budget deficit is already in the trillions of rubles and significantly exceeds the pre-set annual limits. The situation is complicated by prolonged economic stagnation, a decline in real revenues from oil exports, the rapid depletion of the National Welfare Fund’s reserves, and severe sanctions pressure, which is forcing the Kremlin to urgently raise taxes on the population and businesses.

The financiers’ proposals have sparked a sharp internal conflict within the Russian government. The leadership of the Ministry of Defense and part of Putin’s radical political circle have categorically opposed any budget cuts. They argue that reduced funding will halt the operations of military-industrial complex enterprises—which currently serve as the main driver of Russia’s artificially propped-up GDP—and disrupt the execution of ongoing combat missions in Ukraine. Amid these disagreements, dictator Putin has already instructed the government to explore options for freezing spending in the civilian and social sectors, attempting to postpone cuts to military appropriations themselves until the very last moment.

Russian business is currently in a state of managed collapse

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.