On August 28, the Center for Public Analytics "Vezha" held an expert discussion between director Valeriy Klochuk and Ivan Us, chief consultant of the National Institute for Strategic Studies. The session focused on the current issues of the Russian economy, its budget deficit, and the influence of external factors.
The experts highlighted a unique situation: the liquid part of Russia's National Wealth Fund is now less than the annual budget deficit. Moreover, the projected deficit may rise from the current 4.9 trillion to eight trillion rubles. Russia’s finance and economy ministries openly recognize the issue, with some representatives directly urging cuts in military spending and consideration of ending the war.
Possible scenarios include further money printing, cuts to social payments, and even withdrawing bank deposits, all likely to trigger high inflation and declining household incomes. The experts also discussed Vladimir Putin's visit to China and the roles of China and India in maintaining the balance of the Russian economy. Should China reconsider its cooperation, Russia could face a severe financial crisis.
Additional challenges include upcoming EU and US sanctions, which not only limit trade with Russia but also target secondary routes—restricting goods shipped via third countries. This will impact the supply of raw materials and dual-use goods.
The experts noted that while the Russian economy still has some resilience, resources are running out fast. Russia's economic and political future, they concluded, depends not only on domestic decisions but also on the positions of China, India, and the effectiveness of Western sanctions.
