The Bank of Finland has predicted that Russia's economic growth will slow from last year's four percent to about two percent this year and then further decline to around one percent.
However, Russia's economy is not currently undergoing a crisis, but there are extremely high risks associated with its development as long as the country continues its war of aggression against Ukraine.
Russia's economic growth has been based on pumping money into the market—that is, increasing government spending and expanding military-industrial production. However, this approach is reaching its limits, as labor shortages are emerging, prices are rising rapidly, and sanctions are hampering Russia's foreign trade. Additionally, the country's production capacity is nearing full utilization, making further expansion difficult.
Russia's public finances are also in deficit, and inflation has accelerated to the point where consumer prices had already risen by ten percent at the beginning of this year compared to the previous year. However, it remains to be seen how the Russian people—who have historically been accustomed to hardship—will react to this.
From the perspective of world peace, it would of course be beneficial if they became frustrated with their government and ultimately brought it down. However, Vladimir Putin is a dictator who does not shy away from violence, making this scenario unfortunately unlikely.
Previous thoughts on the same topic:
The Price of Xi´s and Putin's Game Is Paid by Ordinary Russians
Europe Needs More Money—and More Will—to Defend Itself
Russia to Triple Its Military Presence on Finland’s Border
