The frictions in Russia’s wartime economy are growing, as massive military spending balloons the budget deficit. Consumers and businesses are gloomier. Growth has slowed.
None of that, however, signals an imminent financial crisis or economic collapse, economists say. With crucial oil export revenues holding up due to high prices from the Iran war, the government is able to find the money to pay for its four-and-a-half-year-old invasion of Ukraine, at least for now.
Meanwhile, low unemployment and government largesse in poor regions help keep a lid on consumer grumbling.
That picture suits the Kremlin’s narrative of stability ahead of Russia’s stage-managed parliamentary election that got underway Friday and concludes Sunday.
But economists warn that longer-term problems are gnawing at the foundations – and could one day result in a crisis.
Consumers and businesses are more pessimistic
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Indicators of consumer sentiment hav
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