War with Ukraine draining Russian economy: banking system in crisis, - WP
Despite Trump's statements about Russia's advantage in the war, economists note that the Kremlin has spent most of its cash reserves, and problems in the banking system are growing.
According to Censor.NET, this is reported by The Washington Post.
It is noted that new sanctions against Russia's oil sector are exacerbating cash shortages and worsening forecasts. Economists suggest that this could lead to a crisis in the Russian banking sector as early as next year. At the same time, Russian dictator Putin continues to take a tough stance in negotiations to end the war.
The sanctions imposed by the United States against Russian companies "Rosneft" and "Lukoil" are increasing pressure on the budget and the energy sector.
"The upstream oil industry is sliding into a crisis, and the most recent sanctions are going to accelerate that," said Craig Kennedy, a former vice chairman at Bank of America Merrill Lynch who currently works at Harvard’s Center.
Economy on the brink of recession
According to Reuters, Russia's oil and gas revenues in December will fall by 49% compared to the previous year. This will significantly deepen the budget deficit, even despite record growth in military spending — up to $149 billion in the first three quarters of this year.
Even before the new sanctions began to significantly affect corporate revenues and the budget, the Russian economy was already heading towards recession.
To stabilise the financial system, the Central Bank of Russia raised interest rates to a record level of over 20%.
"The Russian economy was benefiting from many positive factors like high global commodity prices and the spending-driven boom. And most of these factors have disappeared, and this is why Russia is right now in the worst situation since the war started," said Janis Kluge, an economist at the German Institute for International and Security Affairs.
Economists argue that the significant expansion of corporate lending in Russia during the first three years of the Great War, combined with a prolonged period of high interest rates, created deep problems in the banking system.
