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Putin’s war economy poised for bumpy landing: The Ukraine war triggered an economic boom in Russia built on government stimulus. Three years on, there are gathering signs the bill is about to come due
Putin’s Booming War Economy Poised for Soft, Bumpy Landing: The invasion of Ukraine triggered an economic boom in Russia built on the back of government stimulus. Almost three years on, there are gathering signs the bill is about to come due.
The mood in Moscow and other cities remains upbeat with packed restaurants and busy luxury stores, but a combination of record-high interest rates and persistent inflation is increasingly threatening forecasts for another year of slower, but still war-fueled growth. “A relatively good period for the Russian economy, which was based on previously accumulated resources, is over,” said Oleg Vyugin, an economist and former top central bank official. “High inflation eats away at all that seemingly short-lived success.”
On top of that, Russia is confronted with sanctions, a recently weakened currency, a muddied outlook for oil prices and the prospect that its biggest trading partner, China, won’t shake of