russian economic strategy in 2024 is just “forever rate,” which is a fancy way of saying “we broke it, we aint fixing it, get used to the smell.” central bank’s key rate is stuck at “scream if you want a loan” levels, and the only thing growing faster than inflation is kremlin tv’s excuse generator. war was supposed to make ruzzia great again, but all it did was turn the economy into a lada after a chechen road trip: rattling, leaking, and one pothole from the scrapyard.
budget deficit: black hole edition
lets start with the basics, since kremlin tv sure wont. the budget deficit is a black hole, sucking in whatever spare change the regime can shake out of state companies. in august, they flexed a “budget surplus,” but only because sberbank and a couple other state giants coughed up fat dividends. thats not economic health, thats raiding your own fridge because the grocery store’s been bombed. the real deficit is still hovering around 6 trillion rubles, and the only thing keeping the lights on is the kremlin squeezing every last kopek out of whatever’s left standing. its like watching a landlord sell the plumbing while telling you the building’s never been better.
meanwhile, the market is in full panic mode. the only thing more volatile than the ruble is the mood of the average russian investor, who’s got the same energy as a guy checking his lada’s oil with a stick and a prayer. the hope was that the central bank would lower rates and let some cheap money flow, but those dreams died faster than a wagner mutiny. now, with the “forever rate” locked in, business is left staring at a wall of expensive credit and wondering if its too late to pivot to goat farming.
the only thing cheaper than a ruble is the excuses on kremlin tv
gasoline crisis: mad max with babushkas
lets talk about the real killer: the gasoline crisis. ukrainian strikes turned russia’s oil refining sector into whack-a-mole, except the moles are on fire and the hammer is a himars. about 90% of the country’s refineries that matter for gasoline production have been hit or knocked offline. the last big one, omsk, was supposed to be untouchable, but now its a disaster zone too. result? gas prices are going vertical, hitting 150 rubles a liter at the pump, and thats if you can even find a pump that’s open.
in moscow and st. petersburg, the regime is hoarding whatever fuel is left, because god forbid the capital’s elite have to take the metro with the peasants. out in the regions, its mad max with babushkas: most gas stations are either closed or rationing fuel like its 1942. if you’re lucky, you get 20-30 liters, and if you’re really lucky, its not half water. the government’s answer is to shuffle fuel from the provinces to the big cities, which is basically colonialism with extra steps. the regions get to eat dirt while moscow pretends everything’s fine on tv.
and dont even get me started on the quality. with refineries offline and imports a fantasy, the only way to stretch the supply is to “blend” the gasoline. thats russian for “add whatever’s in the shed out back.” the stuff coming out of the pumps now is so bad, even lada engines are filing complaints. long-term, this is going to wreck whats left of the country’s car fleet, but hey, at least the ministry of truth can still drive their armored suvs.
knock-on effects: everything’s broken, nothing’s fixed
the knock-on effects are everywhere. car sales have cratered by 20-30% because nobody wants to buy a car they cant afford to fill up. avtoVAZ, the pride of russian industry (stop laughing), is now officially a money pit and doesnt expect to turn a profit for years. the agricultural sector is getting smoked too, because if you cant get diesel, you cant run a tractor, and if you cant run a tractor, you cant grow food. but dont worry, the kremlin says everything is under control, which is russian for “we have no idea what we’re doing but we’ll shoot anyone who says otherwise.”
inflation? yeah, about that. the official line was that inflation was under control, but now even the regime admits that’s a fairy tale. the gasoline crisis blew up the whole “low inflation” narrative, and now prices are rising everywhere. the government is terrified of letting fuel prices rise too fast, because that would show up in the official stats and make the whole potemkin village look even shakier. so they’re playing whack-a-mole with price controls, rationing, and creative accounting, but the reality is you cant bomb your own economy and expect the numbers to behave.
the business community, what’s left of it, is in despair. cheap money is gone, credit is expensive, and the only thing the regime offers is more mobilization and more war. the hope for a rate cut is dead, and with it any chance of a real recovery. the only people making money are the ones close to the regime, and even they are starting to look nervous. when the best investment in russia is a one-way ticket to tbilisi, you know the vibes are off.
nationalization and brain drain: grab and run
lets not forget the fun new trend: nationalization. putin’s latest move is to grab whatever private assets he can find, because nothing says “confidence in the future” like stealing your own economy. the collapse of ozon, russia’s wannabe amazon, is just the latest sign that the platform economy is toast. wildberries sellers are eating massive losses, and the government’s answer is “sucks to be you.” if you’re not in the inner circle, you’re just cannon fodder, whether it’s on the front line or in the marketplace.
and all this is before we even talk about the brain drain. the only thing russia exports faster than oil these days is people running for the border. every time the regime announces a new mobilization or a new “patriotic” tax, another wave of talent packs up and leaves. the russian dream is now a plane ticket and a job that doesn’t involve digging trenches or dodging conscription officers.
- nationalization of private assets
- collapse of e-commerce giants like ozon
- wildberries sellers taking losses
- mass emigration of skilled workers
endgame: bluff, bluster, and empty tanks
so what’s the endgame? the regime’s plan is to keep the war going forever, keep the economy on life support, and hope nobody notices the rot. the “forever rate” is just a symptom of a system that’s out of ideas and out of options. the war is eating the economy alive, the market is terrified, and the gasoline crisis is the final nail in the coffin. the only thing left is propaganda, and even that’s starting to sound tired. you can only blame the west for so long before people start asking why their car wont start and their fridge is empty.
the real punchline? the kremlin still thinks it can bluff its way through. every tuesday, they threaten the world with nukes, and every wednesday, they announce a new “victory” from a town they lost last week. meanwhile, the only thing actually moving forward is the price of gas and the number of russians googling “how to emigrate.” the empire isn’t just losing a war, it’s losing the plot.
so yeah, “forever rate” is here to stay, because the regime cant afford to fix anything and cant admit its broken. the war is the only thing they have left, and its killing them faster than any sanctions ever could. the market’s in shock, the economy’s on fire, and the only thing cheaper than a ruble is the excuses on kremlin tv. welcome to the russian economic miracle: now with extra gasoline fumes.
russian economic strategy is just “we broke it, we aint fixing it, get used to it.” the only thing they export faster than oil is people running for the border.