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Russian President Vladimir Putin will not stop unless he is stopped. If Ukraine cannot hold the front line in the current war, the Russian president will have no incentive to end the war he started, and his forces will continue to advance until Ukraine is forced to submit, according to a political, military and economic analysis by Reuters.
But if Ukraine can stop Russia on the battlefield, other options will open up. Although Russia may be able to fight for a long time, the costs for it will rise – especially if inflation rises or oil prices fall.
A credible Western plan to support Ukraine could bring the Russian president to the negotiating table and help secure a decent ceasefire.
Russia’s war economy is unlikely to collapse, but the Russian president may face tough choices if the fighting drags on for several more years.
In particular, the Russian state may have to impose higher prices and taxes on the population – not to mention sending more young men to die in Ukraine!
He may also need to cut government spending on social security, education and health, and if he cuts subsidies to protect the economy from high interest rates, families with mortgages may suffer greatly and some companies may go bankrupt.
Such a situation is not inevitable, and even if it were to happen, the Russian president would not resort to peace!
Although the Russian people prefer peace to war, they do not want a deal that would humiliate the country, as opinion polls indicate.
Moreover, the Russian president does not have to do what the people want, because he has no political rivals. However, the possibility of a painful war of attrition may make him more open to compromise, if US President-elect Donald Trump launches peace talks next year.
Although the IMF expects growth of 3.6%, the Russian economy is not in good health this year!
Interest rates at 21% and the ruble down 6% over the past year are signs of trouble
Russian President Vladimir Putin has put Russia on a war footing, spending 17 trillion rubles ($170 billion) – or 8% of its GDP – on defence and security next year, nearly three times what it spent in 2021, the year before the invasion of Ukraine.
But with workers redeployed to arms factories and the front, the economy is stretched to capacity, unemployment is just 2.4% and inflation may be much higher than the official 8.5%.
Russians believe inflation is running at 15.3%, according to a survey by the Russian central bank, while the price of a basket of fast-moving consumer goods rose 22% in the year to September 2024, according to Russian research firm Romir.
The price of butter has also risen by 34% in the first ten months of this year, according to Reuters correspondents. No wonder, then, that we are witnessing a wave of butter thefts in Russia!
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