Putin loses the economic war. Why the fall of industry is more important than the capture of Avdiivka

Putin loses the economic war and does not win the "military war" quickly enough to compensate for this, says Evans-Prichard's economic observer in the column for The Telegraph. The fall of Avdiivka in this sense does not change anything. In Russia, a "hot" military economy. Defense costs in all forms have tripled after invasion of Ukraine and approaching 8% of national production, which is approximately what was under the Soviet Union.

Military Keynesianism adorns GDP figures that are not reliable, but especially in vain in Russia, where they are manipulated. It is estimated that 800,000 young and most talented people left the country. Another 300,000 were killed or crippled in the meat grinder. The mobilization network continues to expand in a society that is already faced with a demographic crisis. However, alchemy of statistics turned Russia into a macros perme of Europe.

The International Monetary Fund planned an increase of 3% in 2023 and 2. 6% in 2024. "Our economy, unlike others, is growing and became the largest in Europe," said Vladimir Putin at the Forum "All for Victory" in Tula. This seeming resistance has embarrassed many, which led to a permanent feeling of despair at the Munich Conference on Safety Last weekend. In fact, Putin loses the economic war and does not win the "military war" quickly enough to compensate for.

The fall of the Avdeevsky speech changes nothing. Putin spends his armies and two thirds of his tanks on microscopic advancements. "Growth limits have already been reached," said Professor Pavel Bayev from the Oslo Institute of Research in Oslo. - Industrial production is stagnant. The Russian energy sector suffers from reducing revenues and delays in the projects. Losovs in sanctions are closed.

" Rosstat data show that last summer the boom of re -equipment stalled, stopping at the levels far from those that would be necessary to the Kremlin to exceed at least part of the technological power of the event. "Ukraine is not the history of Putin's success. We should not inspire ourselves the illusion that our union is about to fall," said the unmoved Prime Minister of Norway Jonas Gar Stere. The GDP of Russia is a distracted maneuver.

Lack of labor and limited capacity led to overheating of the economy, resulting in interest rates to 16%, while what remained from the consumer economy is atrophied. Since the beginning of the war, the liquid assets of the National Welfare Fund have fallen from 6. 6% to 2. 7% of GDP. The IMF Head Krystalina Georgieva, who grew up for communism in Bulgaria, said that this deformed economy is increasingly similar to the Soviet system, dysfunctional and fragile facade.

"In fact, I think that very difficult times are waiting for the Russian economy," she said. The three of the five most popular articles in the Russian version of "Moscow Times" were about the deficit last Friday. One of the authors was quoted by Mobius Technologies and other companies that turn attention to a sharp shortage of spare parts for hard drives, controllers, motherboards and data storage systems. The spare parts resource, created before the war, has been exhausted.

Graduation parts are sold at high prices. The second story was about the lack of shipbuilding engines. The third was about "empty shelves" in supermarkets, partly because Turkish and Chinese banks block payments from Russia. Vedom's article is cited by Russian businessmen who complain that they can no longer make transactions in Yuan through Chinese banks, including state banks of the Grand Four, because of strict inspections in order to comply with US sanctions.

Payments were stopped whether they were in dollars or not, even if the Russian SPFS and Chinese CIPS system is used, designed to bypass the Western control over the SWIFT system. The Chinese-Russian Treaty on "Friendship Without Borders" actually has limits. Dubai banks close the accounts of Russians with opaque sources of funding, fearing the long -term hand of the US Treasury.

The EU develops plans to impose sanctions against companies in China, India, Turkey, Sri-Linka, Serbia, Thailand and Kazakhstan for helping the Kremlin in a bypass of dual-use. Russia will find ways to bypass these restrictions. But it cannot easily switch to semiconductors from China, as its systems are tuned to American chips, which you have to buy with a high mark on the black market. Revenues from oil, gas and coal are still coming, but the amounts are modest.

They fell from $ 40 billion (£ 32 billion) a month in early 2022 to $ 23 billion in January this year. This is not enough to cover the budget growth by 65% ​​in the last year. The Kremlin is looking for funds, introduces a military allowance for the coal industry and draws up a list of 30 state -owned privatization companies. India and China buy Russian oil, but not at the price of the world market.

The International Energy Agency reports that the Urals oil is sold at a price of $ 66 per barrel, which is higher than a G7 limit of $ 60, but with a 20th DSTC discount to Brent. The loop on Putin's shadow fleet is tightened. The US Ministry of Finance has held liable 50 tankers for impaired limit. Bloomberg reports that half of the ships have not yet dared to leave the ports, and 14 tankers carrying raw oil to India were stuck in anchors.

The jump in oil prices can still save the Kremlin, but Mea has just reduced its forecast of world oil demand for the third month in a row. Increasing supplies of shale oil in the United States continue to compensate for the reduction of OPEC production. Nothing of this changes the fact that Russia can produce enough artillery shells to collapse 3000 pieces a day - with the help of North Korea - whereas the event cannot do it and exhausted most of its stocks.

"Wars won with weapons, and the West does not produce it in sufficient quantities," said the Senator-Republican J. D. Vance, teaching Trump's "point of view" in Munich. Ukraine uses more Patriot missiles every month than the US is producing a year, and there is a five -year order plan. The same applies to 155 mm artillery shells. "We do not produce enough ammunition to support the war in Eastern Europe, the war in the Middle East and perhaps an unforeseen incident in East Asia.

The United States is fundamentally limited," Vance said. He exposed the rhetorical chatter of Europeans. They speak of existential threat, but at the same time they try to achieve a minimalist defense goal in 2% of GDP. Europe believed that the transfer of old stocks of weapons was cheaper and slow pace. It has not mobilized its military-industrial base for two years, despite the fact that the war has become a shadow-wing third world with autocrats. But Mr.

Vance slips into self -deception or evasion and confirms what the Trump administration is waiting for. "I think there is an incentive to sit at the negotiation table right now . . . It will end with a peace agreement," he said. He implies that Putin should receive four annexed areas that he does not control yet. Mr. Vens has an inverted logic. Putin has no incentive to say as long as he thinks he can survive the insane event.

Moreover, if the senator says, the more important imperative is the fight against Xi Jinping, then the first critical line of defense is located on the Dnieper River. Francois Guru Gur Guru Guri Guizburg has stated that it was the most depressed Munich conference over the past 60 years. It can be said that it smelled of 1938.

Undoubtedly, the pendulum of military psychology has been shaken in the benefit of Putin lately - and he will carefully promote the narrative about invincible Russia, but in fact he has not made a great breakthrough, and no one should be deceived by his fantasies about GDP. Russia is inevitably moving to economic exhaustion. It would be a huge mistake to lose self -control for the event. The author expresses a personal opinion that may not coincide with the editorial position.