Russia is facing a new wave of US and EU sanctions while its internal economy is nearing recession, but all this is not enough to curb its capacity to fund the war in Ukraine, according to experts.
“Recession means almost nothing for Russia’s economic and political stability these days,” said Vladislav Inozemtsev, co-founder and Advisory Council Member of the Center for Analysis and Strategies in Europe (CASE), an independent think-tank based in the European Union.
A look inside the Russian economy
Despite being boosted by military spending, the Russian economy is showing signs of sliding towards recession or stagflation.
Inflation remains high and it's coupled with a sharp economic slowdown. Inflation peaked at 10.3% in March and eased to 8% in September, still double the Bank of Russia’s 4% target.
Despite this, the central bank has aggressively cut its benchmark rate, most recently on 24 October, lowering it by 50 basis points to 16.5% — the fourth consecutive cut and a surprise to markets expecting a pause.
High interest rates and acute labour shortages (with the unemployment rate sitting at 2.1%
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