Russian authorities continue to conceal the real consequences of the war against Ukraine for the country’s economy. During a meeting on 7 February, Russian Prime Minister Mikhail Mishustin and dictator Vladimir Putin avoided mentioning key issues, including the Central Bank of Russia’s interest rate hike to 21% in October 2024. This was reported by analysts at the Institute for the Study of War (ISW).
According to Mishustin, Russia’s GDP allegedly grew by 4.1% due to the development of the manufacturing industry, especially engineering and electronics production. He also mentioned that inflation in Russia reached 9.52% in 2024, although Putin said that as of 3 February 2025, the figure had risen to 9.9%.
At the same time, ISW experts emphasise that real inflation may exceed 20%, and the Kremlin’s official figures are far from the truth. In addition, despite the declared low unemployment rate (2.5%), the Russian government hardly mentions the acute shortage of labour caused by mobilisation and the departure of citizens abroad.
Analysts point out that Putin and Mishustin are hushing up the financial crisis, especially the use of funds from the National Welfare Fund (NWF ) for the war. It is expected that the liquid resources of the NWF may be completely exhausted by the autumn of 2025.
Despite the Russian government’s statements about the economy’s “successful adaptation” to sanctions pressure, Russia’s economic prospects remain unstable.
