The Russian economy is facing several major issues, including a labor shortage, soaring inflation, a tumbling ruble, the risk of recession, a real estate bubble, and the nationalization of foreign businesses, which could lead to stagnation and a fall in GDP growth in the long term.
Farmers in Ukraine, such as Valery Kolosha, are facing the consequences of Russia's actions that restrict Ukraine's grain exports.
Russia's invasion of Ukraine and subsequent disruptions in gas supply have caused Europe, particularly Germany, to seek alternative sources of natural gas, leading to a decline in Russia's market share and permanent damage to its reputation as Europe's largest gas supplier.
The brain drain caused by Russia's war on Ukraine, with a majority of highly educated and younger individuals leaving the country, will have a significant negative impact on the Russian economy, causing a record labor shortage and leading to a decline in GDP that will see Russia fall behind Indonesia in 2026.
The residual impact of sanctions against Russia is causing divisions among the Group of 20 countries, with some nations resisting US-led efforts and forming alliances with Russia and China, while the BRICS nations are seeking to reduce reliance on the US dollar.
Russia's blockade of Ukrainian grain exports and extreme weather events have raised concerns about global food supplies, but the OECD suggests that the situation may not be as dire as it seems, with adjustments and adaptations being made to production and logistics chains to mitigate potential shocks in the market.
The West needs to increase pressure on Russia's economy by intensifying sanctions and implementing stricter controls on Russian exports, oil price caps, and financial transactions, while also uncovering hidden stashes of money and putting Russia under a full financial embargo.
The trade sanctions imposed on Russia have benefited India and China, with Russia becoming the biggest supplier of crude oil to India and the bilateral trade between Russia and China potentially surpassing $200 billion this year, resulting in the US reshaping its global trade strategies and Mexico overtaking China as America's biggest trading partner.
Ukraine's missile attack on the Russian Black Sea Fleet in Sevastopol has caused significant damage and could have long-term consequences for Moscow's military capabilities, potentially impacting repair facilities and reducing combat potential, according to the Institute for the Study of War.
Hundreds of companies have left Russia due to its invasion of Ukraine, but others remain due to financial concerns, assets being difficult to sell, and humanitarian reasons, however, the long-term consequences for staying in Russia may include reputational damage and potential financial risks.
Russia has implemented a temporary ban on gasoline and diesel exports, excluding four ex-Soviet states, to stabilize its domestic market and reduce prices for consumers.
Despite facing Western sanctions, Russia has managed to sustain its economy through increased military spending, but questions remain about the long-term viability of this militarization.
