Russia dodges economic collapse but the decline

Russia dodges economic collapse but the decline has started
Analysis by Clare Sebastian, CNN

London (CNN Business)Six months after invading Ukraine, Russia is bogged down in a war of attrition it didn’t anticipate but it is having success on another front — its oil-dependent economy is in a deep recession but proving far more resilient than expected.

The readiness of China and India to snap up cheap Russian oil has helped, but Nechaev and other analysts say Russia’s economy has started to decline and is likely facing a prolonged period of stagnation as a consequence of Western sanctions.

On the surface, not much has changed, bar a few empty storefronts that once housed Western brands that have fled the country in their hundreds. McDonalds (MCD) is now called “Vkusno i tochka”, or “Tasty, and that’s it” and Starbucks (SBUX) cafes are now gradually reopening under the barely disguised brand Stars Coffee.

The exodus of Western businesses, and wave after wave of punishing Western sanctions targeting Russia’s vital energy exports and its financial system, are having an impact, but not in the way many had expected.

Interest rates are now lower than before the war, and the central bank says inflation, which peaked at almost 18% in April, is slowing and will be between 12% and 15% for the full year.

https://www.cnn.com/2022/08/28/business/russia-economy-ukrai…

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Interest rates are now lower than before the war, and the central bank says inflation, which peaked at almost 18% in April, is slowing and will be between 12% and 15% for the full year.

Russia is barely a major economy. Their problem while at war is paying for men and weapons. To do so as the tax base shrinks will demand printing money. That will get way out of hand quickly. Putin can not explain not paying his men. Putin can not explain not arming his men. Putin can not explain hyperinflation.

Russia on the war front is opting seemingly for a long war. If Putin orders a major offensive he will be overextended and beat. Then the Russians will be driven out of Ukraine. Instead Putin wants to bomb Ukraine into nothing over the very long haul. But with western pressure he has to print to get there. He can not get there. He can not go there. But he will.

At this point the western cartel to tell China and India you can pay less could be anywhere from not happening to working like crazy to make prices lower. Both India and China will take oil at lower prices. In relation to that OPEC has to supply at lower prices to keep market and a global recession takes hold.

Russian inflation is not oil inflation. The oil inflation is over. We may see oil get to $60 bbl.

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