Russian officials warn of new disaster for Putin's regime and Russian people; Russians are worried

[Starmix]

According to the report, the Russian economy, amid war and Western sanctions, is showing signs of a systemic crisis. Kremlin officials, who previously broadcast only optimistic forecasts, are now openly expressing concern. The population is also worried. The beginning of this year was marked by a sharp slowdown in the growth rate of the Russian economy. And in quarterly terms, it began to contract for the first time since the spring of 2022. This is not just a decline, but a direct consequence of the protracted and destructive war against Ukraine. Speaking in the State Duma, the head of the Ministry of Economic Development, Maxim Reshetnikov, did not hide his concern: the department " sees the risks of the economy becoming overcooled ." The government, according to him, is pinning its hopes on a reduction in the Central Bank's key rate, which has been at an unprecedentedly high level of 21% for more than six months. The hope that weekly inflation in the range of 3-4% will convince the Central Bank to reduce the rate looks more like a desperate measure than a well-thought-out strategy.

The report also stated that the slowdown in economic growth coupled with unprecedented sanctions pressure threatens the fulfillment of federal budget parameters. Andrei Makarov, head of the Duma's tax committee, stated directly at one of the sessions with Reshetnikov that the current forecasts " seem... overly optimistic ." He admitted that neither the Duma nor the Accounts Chamber can estimate how much money the treasury may lose. The reason is simple: the situation is changing every day, and not for the better. One of the key pillars of the Russian economy – oil – is experiencing serious shocks. The price of Russian Urals, the main source of budget revenues, continues to plummet. From $70 per barrel in mid-January, it fell to $59 by the end of March, $54 in April, and was already $49 at the beginning of May. Such a sharp drop in prices for the main export commodity inevitably leads to a reduction in budget revenues and exacerbates financial difficulties.

The report added that the public recognition of the risks of "overcooling" of the economy by the Ministry of Economic Development is an important signal. This is not just an economic term, it means that production capacities may be underutilized, investments will decrease, and unemployment will begin to rise. What was intended to be a "quick win" has turned into a protracted conflict that is draining the country's resources, draining labor and investment, and, most importantly, cutting Russia off from global technology and capital markets. The more than 5-fold decline in industrial growth rates is not just statistics, it is evidence of a real collapse in the manufacturing sector. The confessions of officials, albeit veiled, only confirm that the war is inexorably destroying the economic foundations of Russia itself.

Watch the report on the YT link.