Kremlin conceals negative impact on Russian economy due to war in Ukraine – ISW
www.pravda.com.ua
Sat, 08 Feb 2025 04:12:34 +0200
Analysts at the Institute for the Study of War ISW point out that the Kremlin is extending its information campaign to conceal the extent of the negative impact on the Russian economy due to the war in Ukraine.
Source ISW Quote from ISW The Kremlin continues to conduct an information campaign likely directed towards both domestic and international audiences that aims to conceal the extent to which Russias protracted war against Ukraine has negatively affected Russias economy.
Details Russian Prime Minister Mikhail Mishustin met with Russian leader Vladimir Putin on 7 February to discuss the state of the Russian economy.
Quote Mishustin claimed that Russias gross domestic product GDP rose in 2024 by 4.1 percent largely due to intensive growth in Russias manufacturing industry likely referring to Russias boost of its defence industrial base DIB since the start of its fullscale invasion of Ukraine in February 2022.
Details The minister argued that the main contributors to the growth of Russias manufacturing industry were machine building, transport engineering, automotive, and computer and electronic equipment.
He also stated that inflation in Russia reached 9.52 in 2024, while Putin declared that as of 3 February 2025, inflation was already 9.9.
Quote Russias true inflation is quite higher than the official statistics the Kremlin is willing to publicise, however several studies indicate that Russias inflation rate is closer to 20.
Details Mishustin emphasised the low unemployment rate in Russia in 2024 at 2.5 but only briefly acknowledged the significant labour shortage in Russia as a reason for Russias low unemployment rate.
He noted that Russias economic growth may be less significant in 2025, as it is very important to stop inflation and ensure longterm economic growth.
Quote ...likely a signal to prepare the Russian population to expect economic hardships in 2025.
Mishustin and Putin also attempted to posture Russias economy as stable in the face of international economic pressure.
Mishustin claimed that Russias fuel and energy complex is adapting and finding new markets.
Details Mishustin claimed that the Russian economy has successfully managed the unprecedented sanctions pressure in recent years, and that antiRussian sanctions are hurting the countries that imposed them more than the sanctions are hurting Russia.
Putin has also tried to present the Russian economy as stronger and growing faster than Western economies.
Quote Mishustin and Putin notably did not mention how the Russian Central Bank raised the interest rate to 21 in October 2024 or how Russia has been drawing from its National Welfare Fund to finance its war effort over the last three years.
The liquidity portion of Russias National Welfare fund may run out by Fall 2025.
To quote the ISWs Key Takeaways on 7 February Ukrainian forces marginally advanced during mechanised assaults in their salient in Kursk Oblast on 6 February, but Russian sources claimed on 67 February that Russian forces have at least temporarily stalled Ukrainian advances southeast of Sudzha.
The Kremlin continues to conduct an information campaign likely directed towards both domestic and international audiences that aims to conceal the extent to which Russias protracted war against Ukraine has negatively affected Russias economy.
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