More and more sanctions against Russia on the one hand and new billions in aid for Ukraine on the other, but neither militarily nor economically does the West seem to be able to bring Russia to its knees. This is also evident from current figures from the Vienna Institute for International Economic Studies (wiiw).
In Russia, last year’s strong growth of the war economy (3.6 percent) will probably weaken somewhat this year to 2.8 percent and decline further in 2025, economic researchers believe and speak of clear signs of overheating. However, compared to the winter forecast, the Second World War has revised Russia’s growth expectations for 2024 upwards by 1.3 percentage points. “Skilled labor shortages and wartime Keynesianism caused real wages to rise by almost 8 percent last year, pushing up private consumption by 6.5 percent,” explains World War II Russia expert Vasily Astrov. “This development could continue for a while. However, high interest rates are likely to slow economic growth and thus inflation.”
Positive prospects for the Russian state budget
The outlook for Russia’s state budget is consistently positive, despite high military spending and lower revenues from fossil fuel exports last year. “Putin will not run out of money for the war,” Astrov says.
Economic threat to Ukraine
For Ukraine, however, the war against Russia is increasingly becoming an economic threat. The difficult military situation and delays in further financial and military aid from the West are dampening economic development, according to the spring forecast. “Ultimately, everything depends on sufficient and timely military and financial assistance from the West,” emphasizes Olga Pindyuk, lead author of the forecast. In 2024 alone, there will be a financing gap of $40 billion (about €37.6 billion) in Ukraine.
Source: Krone
I am Wallace Jones, an experienced journalist. I specialize in writing for the world section of Today Times Live. With over a decade of experience, I have developed an eye for detail when it comes to reporting on local and global stories. My passion lies in uncovering the truth through my investigative skills and creating thought-provoking content that resonates with readers worldwide.
