Russia's economy is weakening, and the country may turn its back on Putin

01.04.2024 15:00 2 min reading
Russia's economy is weakening, and the country may turn its back on Putin

Economists have warned that Russia's ability to withstand sanctions will be tested next year, suggesting that Vladimir Putin's popular support could decline if the West tightens sanctions, worsening living conditions in the country.

Although Western sanctions have so far moderated their impact, experts such as Jeffrey Sonnenfeld and Stephen Tian of Yale University expect a potential reversal around the US presidential election in November. They believe that if President Joe Biden is re-elected, the West is likely to continue supporting Ukraine while imposing tougher sanctions on Russia, which could lead to increased opposition to Putin's leadership among Russians.

According to Sergey Guriev, an economist and future dean of the London Business School, social unrest could be on the horizon for Moscow and the Russian economy could resemble the era of the end of the Soviet Union, before cuts in state support caused significant economic downturns in sectors such as production.

Despite Russia's reported economic growth of 3.6% in 2023 and the high percentage of Russians who express optimism about the economy, experts say such statistics are misleading. Sonnenfeld criticized Russia's growth data as being manipulated by the Kremlin to present a rosy picture while ignoring less favorable data.

While Putin portrays Russia as a booming global economic powerhouse, Guriev suggests that this narrative may be misleading and serve Putin's dictatorial agenda to maintain public trust.

Contrary to official reports, other economic indicators paint a bleak picture, including significant emigration, declining foreign investment and a potential economic slowdown. Despite heavy military spending supporting the economy, experts warn that this cannot continue indefinitely, especially if tougher sanctions are imposed.

Biden's potential re-election and tougher sanctions could deepen Russia's economic woes, leading to declining living standards and increased civil unrest. While Guriev thinks a complete economic collapse is unlikely, he expects significant challenges such as inflation and limited growth that will potentially require painful economic restructuring.

Some economists argue that Russia is in a precarious position as it cannot afford to win or lose its current conflicts due to its economy's heavy dependence on military spending.



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