this post was submitted on 20 Aug 2024
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Russian economy is going towards ruin...
... but it's not nearly fast enough to have a substantial impact on the war in Ukraine. Russia is good to fight for another 2 or 3 years, maybe an additional year if they really push it. Can Ukraine do that? Not unless NATO seriously ramps up high tech weapon deliveries.
No, this is it. The military industry is one of the places Russia can not afford shortages. The fact that they have worker shortages, means they can not take enough workers from other industries. This is war, so producing weapons has priority. We also see wages and benefits for soldiers rising all the time. They probably have shortages in that too. Inflation is already high and the intresst rate is incredibly high too. We have seen some large blackouts already and winter is coming. At the same time Russian farmers have trouble finding workers, which drives up food prices. China is stopping payment from its banks with Russia, so imports from China will likely drop. All of that is going to drive up inflation. Inflation right now is offically at 9.1% in July. The impact of loss of payment with China is not part of that and winter will means higher energy demand, with Ukraine targeting energy infrastructure.
Make no mistake Russia is in an economic crisis. 9.1% inflation with 18% intrest rate is really a telling sign. It will get worse, but it is already bad.
That's not the point. The point is when will this effect the war? Significantly. Enough to matter to Ukraine.
If you want some timelines, summer 2025 is where I expect Russia to run out of steam. That's when they will have gone through pretty much all USSR equipment they had and they are not producing nearly enough to keep up with the current rate of attrition. It will also be the 4th year of war, so also the 4th year of sanctions. Remember that when those sanctions were put into place, they immediately said it would take time before they started to really hurt. Well, they are hurting in a significant way already and the noose is only getting tighter. I think they might just make it to the end of 2025, but I don't see them keeping up the war into 2026 unless China steps in and starts supplying military aid.
There are a lot of aspects to this war, but I think the combination of running out of money, people and military hardware has to lead to some serious reconsideration of their approach.
But the regime won't survive not winning the war, so we'll see. Just don't expect that whomever replaces Putin will be less dangerous. They are more likely to be truly extreme, rather than only cynically so.
We have had many predictions like that before. I believed in some and I take myself to be quite conservative in these estimations. What I saw is that none of them actually happen as an event, but very gradually. The best example is artillery shells. Media has predicted that Russia will run out of shells many times, but it doesn't happen of course, because thats not how the world works. They just reduce consumption. This reduction was not big enough for any media to even report.
What im trying to say is that there is very likely not going to be an event when Russia cracks. As sanctions are applied, workarounds are found. They have enough people by sheer numbers to at least defend the front for many years to come.
You mean lower weapons production, due to lacking workers? Problems with the electricity grid, shutting down factories and transport to the front. China refusing to transfer payments making it much harder to buy weapon parts. Economic problems causing some protests, which requires armed men to put down. Hence fewer soldiers to the front line.
It already matters to Ukraine.
The thing is that Russia isn't on track of winning the war, at all, so fighting for 2-3 years more will just be bad for Ukraine but not detrimental to their survival.
It will for Russia though and that is if it isn't already too late for them.