Vladimir Putin is increasingly concerned about the weakness of Russia's war economy. Experts point out, for the Reuters news agency, that the pressure that Donald Trump is putting on Russia is expected to have another strong impact on the Russian economy.
Russia's economy, driven by oil, gas and mineral exports, has grown strongly over the past two years despite multiple rounds of Western sanctions imposed after the 2022 invasion of Ukraine. But domestic activity has been strained in recent months by labor shortages and high interest rates imposed to tackle inflation, which has accelerated under record military spending, A2 CNN reports.
This has contributed to the view within some of the Russian elite that a negotiated solution to the war is desirable, according to Reuters sources.
Trump, who returned to office on Monday, has vowed to quickly resolve the Ukraine conflict, Europe's biggest since World War II. This week he said more sanctions, as well as tariffs, on Russia were likely if Putin did not negotiate, adding that Russia was heading for "big trouble" economically. A senior Kremlin aide said Tuesday that Russia had so far not received any specific proposals for talks, CNN's A2 reports.
“Russia, of course, is economically interested in negotiating a diplomatic end to the conflict,” Oleg Vyugin, former deputy chairman of Russia’s Central Bank, said in an interview, citing the risk of growing economic distortions as Russia turbo-charges its military and defense spending.
Vyugin was not one of the five sources, all of whom spoke on condition of anonymity because of the sensitivity of the situation in Russia. The extent of Putin’s concerns about the economy, described by the sources, and their impact on views within the Kremlin about the war, are documented here for the first time.
Kremlin spokesman Dmitry Peskov, asked about the Reuters report, acknowledged "problematic factors" in the economy but said it was developing at a high pace and was able to meet "all growing military requirements" as well as all welfare and social needs.
"There are problems, but unfortunately now the problems are accompanying almost all countries in the world," he said. "The situation is considered stable and there is a margin of safety," he concluded. (A2 Televizion)
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