Russia’s budget is ‘in the red’ – now is the time for more sanctions, Ukraine’s foreign minister says
Andrii Sybiha says that Russia’s budget “is in the red” and now there’s a “real possibility” of making the cost of continuing the war unbearable for Moscow.
In a post on social media, Sybiha says: “Despite the Russian government’s efforts to soften the impact of sanctions, Russia’s economy begins to face some dramatic issues while it enters recession.”
It comes amid reports (see our 11.39 post) that the US is preparing further sanctions on Russia’s energy industry.
Sybiha adds: “Together, we absolutely can stop the Russian War Machine by running it out of fuel. Let’s do this now.”
Economic woes in Moscow?
Economy minister Maxim Reshetnikov warned in June that Russia was on the brink of a recession unless monetary policy was changed.
Russia’s highest military spending since the Cold War has stoked inflation.
This in turn has prompted the central bank to raise its key interest rate to 21% in October – the highest level during Putin’s rule since 2003.
The economy is also shackled by the cost of credit and labour shortages, according to analysts.
With the economy slowing but Russia still spending vast sums on its war in Ukraine, Moscow faces the prospect of having to raise taxes and cut spending.
