Russia’s economy beginning to collapse due to war and sanctions – WSJ

30.03.2023 00:59

Russia’s economy is beginning to gradually collapse due to a long war in Ukraine and sanctions introduced against the aggressor country.

That’s according to The Wall Street Journal, Ukrinform reports.

According to the news outlet, Russia’s government revenue is being squeezed and its economy has shifted to a lower-growth trajectory, likely for the long term.

Russia’s biggest exports, gas and oil, have lost major customers. Government finances are strained. The ruble is down over 20% since November against the dollar.

In addition, the labor force has shrunk as young people are sent to the front or flee the country over fears of being drafted. Uncertainty has curbed business investment.

“Russia’s economy is entering a long-term regression,” predicted Alexandra Prokopenko, a former Russian Central Bank official who left the country shortly after the invasion.

While there is no sign the economic difficulties are bad enough to pose a short-term threat to Russia’s ability to wage war, state revenue shortfalls suggest an intensifying dilemma over how to reconcile ballooning military expenditures with the subsidies and social spending that have helped President Vladimir Putin shield civilians from hardship.

Russian billionaire Oleg Deripaska warned this month that Russia is running out of cash. “There will be no money next year, we need foreign investors,” the raw-materials magnate said.

Having largely lost its European market next door, and with other Western investors pulling out, Moscow is becoming ever more reliant on China, threatening to realize long-simmering fears in Moscow of becoming an economic colony of its dominant southern neighbor.



  1. What most miss in regards to China -in particular opinions recently China was humiliated by Russia for deploying nuclear arms to Belarus- is that actually they are great pals working together to get energy sales to settle in the Yuan. In a system where the USD can’t be used to enforce sanctions – China and Russia and other actors who would violate international norms win. That was the outcome of the recent summit.

    And sure while Russia will not be the most important in that relationship, they still have a part to play to help establish the Yuan as a settlement currency.

    • Not sure I agree with the Yuan becoming a settlement currency. IMO as long as the yuan is controlled not too many countries will se that currency as a form f settlement. Similar to the rubble before the war. Sure some use but never widely used.

  2. The mafia economy is going through history’s slowest collapse. It’s been collapsing since a half a year, at least.

    • Watched an interesting video last night, which destroys the russian theory about using the Chinese Yuan for transactions, in the hope of replacing the dollar as the world reserve currency. The US, EU, UK all use the dollar as the reserve currency, which amounts to over 65% of all transactions. The Chinese Yuan accounts for 2%.

      • Replacing the dollar has been a rs wet dream of these trash countries for yeas now, all to no avail.

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