The Russian Federation, with oil and gas revenues almost halved, does not have enough money to maintain its standard of living and wage war. Russia is losing its labor force, foreign investment has disappeared, and the ruble has plummeted. Inflation is picking up.

According to The Telegraph, Russian President Vladimir Putin was clearly prepared for the initial economic consequences of the war against Ukraine, the war has dragged on much longer than he expected. As a result, the economy is increasingly exposed to the ongoing fighting, and Putin is running out of options.

"The situation is changing quite rapidly and in a negative direction," Oksana Antonenko, a geopolitical risk advisor, said at an event at Chatham House. "At the end of this year, it is quite clear that Russia will be in a much worse macroeconomic situation than it was last year, and this will be a sustained trend."

"He built their defenses very well. They had a lot of reserves and their debt ratios were very low. They had budget and current account surpluses, and the energy crisis helped them," said Timothy Ash, an associate fellow in Chatham House's Russia and Eurasia program.

Last summer, in the early months of the war, the Kremlin ran a $28 billion budget surplus, according to the Kiev School of Economics. By last month, the national account deficit was $1.4 billion. "It's a slow burn," Ash says. "As time goes on, the harder it gets for them. They're going to have to make a choice: guns versus oil."

Earlier OBOZREVATEL wrote about the fact that Hong Kong, Kazakhstan and Armenia sell to the Russian Federation microchips, which fell under sanctions. Lately, Russian companies change the code of goods so that the banks without problems to conduct problematic transactions.

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