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Russia's Economy Deteriorates Amid War and Air Raids

11/29/2025

29 4 Full Breakdown

Center

Russia's Economic Strain

Russia faces ongoing economic strain due to the war.
Air raid sirens are a nightly occurrence in central and southern regions, disrupting daily life.
Steel demand fell 10% amid ongoing industrial weakness.
Machinery demand fell 32% amid broader equipment shortages and investment slowdowns.
The budget deficit is projected to reach 2.6% of GDP.

Left

Russia's Budget Crisis

Russia's budget deficit nears 6 trillion rubles ($76.8 billion).
Oil revenues are projected to fall 35% year over year.
The government prints money to cover the gaps.
Oil discounts to India reach $7 below Brent amid US sanctions.
China raises prices on export-controlled goods, exploiting Russia's reliance and straining military capacity.

History

Historical Context

The 1998 Russian financial crisis stemmed from low oil prices and economic instability following the Soviet Union's collapse. The crisis peaked on August 17, when Russia defaulted on government debt, leading to a budget deficit of 6% of GDP. The International Monetary Fund intervened with a $22.6 billion bailout, but the long-term effects include ongoing economic strain and a projected budget deficit of 2.6% today.

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Russia's Economic Strain

Russia faces ongoing economic strain due to the war.
Air raid sirens are a nightly occurrence in central and southern regions, disrupting daily life.
Steel demand fell 10% amid ongoing industrial weakness.
Machinery demand fell 32% amid broader equipment shortages and investment slowdowns.
The budget deficit is projected to reach 2.6% of GDP.

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