Maintaining current sanctions against russia, the aggressor nation, would still leave the Kremlin with enough financial resources to wage war against Ukraine for at least another three years. This conclusion stands despite the russian economy now facing a "sugar hangover" after a period of "hydrocarbon growth," marked by mounting problems that could specifically affect its ability to produce missiles and other weapons used against Ukraine.
These findings come from a new report by the Washington-based Center for Strategic and International Studies (CSIS). The report’s authors modeled three potential future scenarios and assessed how each could impact the aggressor's economy.
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According to a summary of the report provided to the media, the three scenarios are as follows:
- Maintaining current sanctions: russia would retain enough financial reserves to continue its war against Ukraine for at least another three years.
- Partial easing of sanctions: russia’s overall macroeconomic position would remain largely unchanged, though the aggressor would gain additional resources to expand its military efforts.
- Radical strengthening of sanctions: russia would rapidly lose the resources needed to continue the war, which could force the Kremlin to engage in genuine negotiations.
The CSIS experts stress that in all scenarios, russia’s economy will remain "constrained, but not crushed."
They also caution against assuming that economic pressure alone can change the Kremlin’s behavior, as russia appears committed to a long-term confrontation with the West.
Key internal factors currently affecting russia’s wartime economy include:
- Worsening labor shortages
- An overheated credit bubble
- Unpredictable oil and gas revenues
- Increasing economic dependence on China
We will explore other issues and aspects of this report regarding russia’s resource base for continuing its war against Ukraine in future publications.
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