Russia's economy in crisis: Putin's key industries under pressure

Russia's economy in crisis: Putin's key industries under pressure

The Russian economy faces serious challenges. How Mercury reports, inflation in Russia has currently reached 9.3 percent, which is further exacerbated by the sharp fall in the ruble. Despite several interest rate increases by the central bank, which has now raised the key interest rate to 21 percent, inflation remains stubborn and is putting a strain on companies and consumers. Economists are warning of an impending wave of insolvencies, particularly in the hard-hit shopping center industry, of which around 25 percent are considered at risk of insolvency. This development could have dramatic consequences for the retail sector, which is already in a difficult economic environment.

Industry under pressure

In addition to retail challenges, the defense industry is experiencing severe financial pressure. Loud Wikipedia Western sanctions and the lack of crucial components on the international market are serious problems for this industry. A lack of personnel is also perceived as a major challenge, which has a negative impact on production capacities. While defense spending remains high due to geopolitical tensions, the question of Russia's long-term economic stability remains uncertain given these multipliers. Experts attribute the record high spending to the Ukraine conflict.

Overall, the picture emerges in which dependence on raw materials and high inflation are clouding Russia's economic prospects. Despite nominal growth in gross domestic product, fundamental diversification of the economy is seen as necessary to prevent future crises. The challenges are further intensified by the international environment and the continued pressure of Western sanctions, which could potentially lead to a profound rethink of Russian economic policy.