Four years after Russia's full-scale invasion of Ukraine, the Russian economy is showing clear signs of structural exhaustion. The contours of a genuine economic endgame are coming into view for Russia. This is the finding of a new Kiel Report published by the Kiel Institute for the World Economy and the Stockholm Institute of Transition Economics.
When somebody “hits their limit” that means they are stagnating and not falling or collapsing. It is also important to be clear that this is about the economy.
If the Russian war economy would not be able to increase overall production(not necessarily production of specific weapons, but overall), you would expect them to slow down their advance and take higher losses, as the soldiers lack weapons and whatever to make that happen. We also we see fewer air attacks against Ukraine.
That seems to be the case. Russian personal casulties are generally pretty high and they are not taking a lot of land. At the same time Shahed attacks are 30% down in June compared to May.
Big losses would happen, if Russias economy collapses and only some time after that. That might be the case given the current fuel situation in the country.
Correction: the war economy. Important distinction because it is a specific type economy that has switched to mainly sustain a war at the cost of other expenses, and not a normal economy. If the war economy reaches its limits, so does the war effort.
Mostly because they have been proven ineffective, since Ukraine is shooting almost all of them down. It doesn’t prove anything about the economy.
Again, I’m not convinced Russia will soon be on its last leg, I want to be hopeful, but I’m not anymore at the moment.
Seeing is believing…