Russia's looming uncertainty: War's end brings economic fears
The war against Ukraine, which has been ongoing for nearly three years, has placed Russia at the top of the list of countries subject to sanctions. It has also led to losses estimated at 600,000 people. Although politicians and wealthy entrepreneurs are exhausted by the war, its conclusion also evokes genuine fear, according to those close to Putin who spoke to Meduza.
- It is difficult to predict how life will be after the end of the special operation - says a source close to the Kremlin. - What goals will the country have? Currently, the priority is the war, but after it ends, there will be a need to think about the future, strategy, and objectives — this evokes genuine fear, they add.
State Duma elections
Russia is also facing elections to the State Duma. - Now, no one understands what will happen with the war. If the war is still ongoing by then, a force based on ultra-patriotism will be needed, potentially a new or revived "A Just Russia" - say those close to the Kremlin.
If the war ends, moderate forces will be needed. - And if all this ends, on what terms? Much depends on that, too. This rather concerns the United Russia programme. What to prioritise: the restoration of new territories or a return to the pre-war standard of living? They add.
A spokesperson for the ruling party's leadership mentions that the composition of the United Russia list will depend on the situation at the front.
"No one desires an eternal conflict"
- On one hand, everyone is tired and would like the war to end. No one desires an eternal conflict. Some may emphasise that peace must be achieved on Russia's terms, but it is still a vision of peace. This sentiment has particularly intensified after the attacks by Ukrainian forces on the Kursk region, indicates a Kremlin source.
Big business also feels uncertain. Due to sanctions, Russian entrepreneurs have lost access to Western markets, decreasing their income and investment opportunities. Despite cooperation with countries such as China and Turkey, which also partially adhere to Western restrictions, the situation is unlikely to change after the war.
Economic promises of Russia's sovereign future remain on paper — difficulties with producing aeroplanes, tankers, and industrial technologies demonstrate limitations. Six months ago, studies showed that half of Russian enterprises could not find domestic replacements for imported machines, and many of them had difficulty acquiring them even from "friendly" countries.
Putin's war economy
Although huge investments in the arms industry have created an illusion of growth, the International Monetary Fund forecasts that from 2025, Russian GDP will drop to 1.3 per cent, and the Bank of Russia warns of possible stagnation. Meanwhile, the government is pushing to increase budget revenues— currently, it spends every third rouble on the war, and a new tax reform for 2025 is expected to bring 3.6 trillion roubles in additional revenue.
- However, these measures may prove insufficient, warns economist Natalia Orlova, predicting that soon there will be a need to seek additional income. Elina Rybakova from the Peterson Institute for International Economics notes that ending the war may be just as challenging for the economy as the ongoing war.
Defence expenditures account for 6 percent of GDP, and reducing them would raise questions about the future of workers and factories shifted to wartime production.
