War on Russian territory will exacerbate Russia's economic problems - Bloomberg
Russia's full-scale invasion of Ukraine has already cost dictator Vladimir Putin tens of billions of dollars: sanctions continue to negatively impact Russia's economy, and the terrorist state's revenues are falling. Now that the war has begun to move into the territory of the Russian Federation itself, its economic problems will only get worse.
Bloomberg writes about this. It is noted that this refers to the operations of Russian volunteer units in the Belgorod region of the Russian Federation. They fought long battles with Russian troops, and there are regular explosions and accidents on the railway and beyond in the region.
We should also not forget about the "cotton" in Kursk, Krasnodar, Voronezh and even Moscow, which have been repeatedly attacked by drones.
For example, in the Belgorod region, thousands of people have already moved to temporary shelters in the same or other regions of the Russian Federation. And in the border town of Shebekino, several local factories were forced to shut down because their employees left the town.
"Everyone who is close to the war zone is leaving or thinking about it. This is a long-term consequence - even if things go well, people are unlikely to return quickly," said Yevheny Gontmacher, an economist and former official.
The border regions of the Russian Federation are home to 10% of the 143 million population, so the intensification of full-scale military operations will begin to affect the Russian economy in the third quarter of this year. Bloomberg Economics believes that the already meagre forecast for Russian economic growth of 0.8% in 2023 could be further reduced.
Unrest in the border regions will shift the focus of the local economy from development to survival. In addition, the flight of residents of the Russian border area away from the fighting and damage to infrastructure will increase costs, says Natalia Zubarevich, an expert on the regions of the Russian Federation at Moscow State University.
As OBOZREVATEL previously reported:
- Russia increased its military spending by 282% over the year, to $26 billion in January-February 2023. This affects the budget of the aggressor country. In just two months, Russia spent more than 40% of all planned annual expenditures on the military sector. This increases the record hole in the Kremlin's budget.
- International sanctions imposed on the aggressor country of Russia directly affect its ability to wage war against Ukraine. First of all, because they limit the activities of the terrorist state's military-industrial complex and gradually destroy its economy.