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Russia's economy has entered the death zone
- jackschultz 9mo agohttps://archive.ph/uygcK https://archive.ph/uygcK Edit for the good metaphors. > It has entered what mountaineers call the death zone: the altitude above 8,000 metres at which the human body consumes itself faster than it can be repaired. > Over the past four years the Russian economy has bifurcated into two distinct metabolic systems... The body is metabolising its own muscle tissue for energy. > A recession is like fatigue: rest and you recover. Russia’s condition is like altitude sickness: the longer you stay, the worse it gets, regardless of rest. > But Vladimir Putin is not only watching his own oxygen gauge. He is watching the other climbers. Always a fan of the writing style the Economist promotes.
- wuschel 9mo agoI found the metaphors / analogons rather disturbing e.g. metabolism, etc. Does the human body have a Chinese assistent with an oxigen tent at 8000 metres?
- franktankbank 8mo agoNo kidding. This is a world war already, with China and India on the side of Russia. Fuck them.
- tim333 8mo agoThey are kind of neutral. China has announced it "will supply humanitarian energy assistance to Ukraine."
- k_bx 9mo agoAs a Ukrainian at war since day 1 – I don't buy it. They will sell their gas at discount to China until the very end. Military force is the only way to get them to the death zone.
- mdavid626 9mo ago[flagged]
- vondur 9mo agoThat is probably true, but if they are selling at a loss, it can only go on for so long.
- mdavid626 9mo agoUkraine might have less time than Russia does. Russia only has to survive 1 day more.
- dijit 9mo agoI agree with your point overall but realistically speaking, its not like the death of Ukraine will fix Russias economy, even if it did: not in a single day. You can exhaust yourself completely and be dead on your feet. Doomed, is the expression.
- nradov 9mo agoThere is a strain of thought in Russian political circles that they'll be doomed anyway due to lack of defensible borders if they fail to capture Ukraine. This could explain some of their actions that otherwise seem irrational and counterproductive.
- gzread 9mo agoIt doesn't seem to make any sense: nobody was invading Russia until Russia decided part of Ukraine was Russia (and then Ukraine invaded it), and why would Ukraine be a more defensible border than the actual border? Ukraine borders NATO, after all.
- nradov 9mo agoFrom the Russian perspective it actually does make a bit of sense, in a twisted sort of way. They were invaded from the west before, most recently by Hitler and before that by Napoleon. There are no good natural defenses to protect Moscow and so they seek to establish defense in depth with additional buffer territory. (I write this not to justify recent Russian acts of aggression but to explain some of their internal strategic thinking.)
- mdavid626 9mo agoWhat is Europe/USA fueled by? Debt. The Bubble. Is that sustainable? I don’t think so. What’s the point of the article? To prove the west’s superiority?
- Krasnol 9mo agoThe West's part in this is also part of the article making the content of your comment superfluous. You'd know if you'd have read it. So what's the point of the comment? Your fear that it might be superior?
- nosianu 9mo ago> Debt That is the very basis of our currency, and the basic idea is a good one in an idea-heavy economy more reliant on innovation than natural resource constraints. Also, if truly becomes too much we will just have one of the many many currency changes. My grandparents lived with about five (could be as many as seven) currencies throughout their (German) lives, for example. As long as the real values remain, the factories, the people, the roads, the buildings, that is not a problem overall. It's not like people can emigrate to alien worlds, and on earth the places with the best real economy will be where they will go - have to go. Money is the carrot dangled in front of us to keep us moving and to create real value things. The carrot can be updated and changed if the current one starts to lose its appeal, it is not what ultimately matters. The point of view of an individual and the big picture are very different things.
- krautburglar 9mo ago[flagged]
- tliltocatl 9mo agoNot that you aren't factually right with regards to all modern technology being funded thru MIC, but USSR/Russia had exactly the same kind of MIC and has miserably failed at converting it to something profitable in the past. No reason to expect anything different this time - it's probably even worse because every successful entrepreneur that wouldn't leave the country ends up in prison. That said, there isn't much of good news for Ukraine either, sadly. The fat man slims down but the thin one starves to death.
- krautburglar 9mo agoUSSR vs 2026 Russia is apples and oranges. USSR: kicked their educated jews out (twice -- pogroms & doctors plot), kicked most of their educated gentiles out in 1917, used up their remaining human capital as cannon fodder against hitler. Everything USSR had was gifted from the west to keep the west's military-industrial grift running (see Antony Sutton's works for details). They were a boogeyman used by western elites to extract wealth from their own taxcattle. Modern Russia is a gas station and strip mine with decent relations to the south and the east. Not a phenomenal position, but a hell of a lot better than what they had. Building up their defense sector so that they don't get internationally looted again (i.e. the 90s) is the right move for them, and an unfortunate reality for us.
- tliltocatl 9mo agoAside from some factual errors, that's one way to look on things. Another one is that USSR's political top, however incompetent, released their personal fates are tied to their country, while the modern ones plan for a retirement elsewhere (or at least did so before SHTF in 2022). > USSR: kicked their educated jews out (twice -- pogroms & doctors plot) Sorry, that's not how it happen (source: my grandfather being a USSR Jew). Pogroms were before USSR (and were a huge factor in USSR becoming a thing) and before most Jews had access to upper education. The pre-WWII USSR was perhaps the most Jewish-friendly country in the world, or at least in Europe (however low of a bar it was at the time). After the purges and the war, with most of pre-revolution intellectual communists dead or worse and fresh-baked ex-peasant comrades now forming most of the bureaucracy, the pendulum came swinging back. > kicked most of their educated gentiles out in 1917 Forced deportation was a few thousand cases, mostly humanitarians. Most of the educated gentiles left voluntary (showing their good judgement). And then emigration controls were put in place so the rest wouldn't leave - it's just 20's USSR weren't yet the totalitarian state it would latter become and had no machinery to prevent people from leaving. > used up their remaining human capital as cannon fodder against hitler Not like Stalin would not prefer to use cannon fodder elsewhere. It just wasn't an option at the time. > Modern Russia is a gas station and strip mine with decent relations to the south and the east That's what it was in the aughties. No more. > Building up their defense sector Russia already got damn nukes. That's the best defense against symmetric warfare the money can buy - and against asymmetric an inflated defense sector doesn't help much. Russia didn't built up defense sector because of any genuine or perceived threat, rather for the same reason USA does: it's a huge pork barrel. > they don't get internationally looted again Looted as in being sent food aid? (Well, truth to be told, this aid came with a heavy load of Mormon and Scientology cool-aid drinkers). The whole "90's looting" is tankies' legend. It was exactly the same kind of de-industrialization that happened in the West - except the social guards weren't in place and the state machine was totally collapsed. Which is certainly not a fault of any other nation. > the right move for them, and an unfortunate reality for us. The problem isn't "building up the defense sector". The problem is damn invading neighborhood country. Not only was it an asshole move, it was incredibly dumb because it leaves no good exit option. Even if the hostilities in Ukraine ends one way or another, the "new elite" aka bunch of goons with guns aren't going anywhere.
- lovegrenoble 9mo ago[flagged]
- tonymet 9mo agoDéjà vu … Since Crimea Invasion Russia’s Economy Is On the Brink of Collapse" – CNN Business, December 2014. "The End of the Putin Era? Russia’s Economy Is Tanking" – Newsweek, December 2014. "Russia Heading for Economic 'Colossal Collapse'" – BBC News (quoting Alexei Kudrin), December 2014. "How the Oil Price Collapse Could Topple Putin" – The Guardian, 2015. "Russia’s Economy Is a Mess" – The Atlantic, February 2015. "Russia’s Coming Economic Collapse" – Forbes, June 2015. Since Ukraine War Post-Ukraine Invasion (2022–Present) "The Russian Economy Is Heading for a Meltdown" – The Economist, March 2022. "Biden: The Ruble Is Reduced to Rubble" – Associated Press (reporting on White House statements), March 2022. "Russia Faces its Worst Economic Collapse Since the Fall of the Soviet Union" – Bloomberg, April 2022. "The Implosion of the Russian Economy" – Foreign Affairs, July 2022. "Russia’s Economy Is Dying a Slow Death" – Business Insider, 2023. "Is Russia’s Economy On the Brink of Collapse? Why Trump Might Be Right" – The Guardian, September 2025. "Stormy Weather Pummels Russia's Economy: Cracks Are Appearing" – CEPA, February 2026. "The Russian Economy Is Finally Stagnating" – The Guardian, February 2026.
- mdavid626 9mo agoYes, it seems like that’s the propaganda. The free speech democratic West, instead of reporting about the objective truth, tells us half truths for their own benefit.
- nomel 9mo agoeconomist.com is a website. It's not, and doesn't represent, the whole of western civilization.
- mdavid626 9mo agoAre you sure? Which western media says different opinion?
- nomel 9mo ago90% of the media in the US is owned by 6 companies [1]. We, the people of the western civilization, are not those 6 companies. Most of us don't trust the media [2]. With that freedom of speech, these "news" agencies can be as biased as they want, lie in all sorts of ways (omission, etc), they mostly just can't slander/defame. Almost all are strongly aligned to the republican party or democratic, and all of them are aligned to common goals like oil and Israel. It's best to watch the news knowing that there's an attempt at manipulation. Luckily, with the anti-alignment of the news agencies, the "other side" will often loudly point out flaws. The only hope for reasonable context/nuance over here is through independent journalists. Don't just the world through the lens of a few billionaires. [1] https://pwestpathfinder.com/2022/05/09/the-big-sixs-big-media-game/ https://pwestpathfinder.com/2022/05/09/the-big-sixs-big-medi... [2] https://news.gallup.com/poll/695762/trust-media-new-low.aspx https://news.gallup.com/poll/695762/trust-media-new-low.aspx
- dh2022 9mo agoRemember the Economist Indicator - always take the opposite side of what Economist prints.
- dyauspitr 9mo agoHow does Russia have $73 billion dollars worth of debt. Who is buying Russian treasuries? Also how did the GDP grow by 1% in 2025, is that a function of the internal Defence spending activity?
- kaivi 9mo ago> how did the GDP grow by 1% in 2025 Build tanks -> increase GDP Send those tanks to burn with men inside -> increase GDP per capita
- XorNot 9mo agoIt's the classic issue of any metric: there are assumptions behind it's usefulness.
- red-iron-pine 8mo agoessentially a highly explosive "broken window fallacy"
- simonh 9mo agoI think national growth minus growth in the military sector was negative last year. It looks like Russian bonds are largely bought by Middle Eastern based hedge funds and family funds or trusts.
- dyauspitr 9mo agoI guess $73 billion is actually a pretty small number at the end of the day when you compare it to even a developing nation like India with $1.5 trillion of bonds issued.
- kergonath 9mo ago> is that a function of the internal Defence spending activity? Yes, pretty much. But even that peaked at some point in 2023 and is trending downwards now.
- ivan_gammel 9mo ago
- nradov 9mo agoA "dead" centrally-planned economy can continue lurching forward like a zombie for a long, long time. No one should count on this ending the war any time soon.
- hcknwscommenter 9mo agoAny insights (anecdotes) from those in Russia and willing to opine on whether the economy seems like its collapsing presently?
- temp483332 9mo agoI am not in Russia, but I have friends in Russia and visit Russia once a year or so. From what I see there is no visible economy problems in Russia. Yes, there are some temporary issues in some areas, but generally it's resolved promptly. There is some decrease of real salary/price increase, but not that significant. Probably situation in EU is worse. It looks like economic block of Russian government is really professional and know what to do. It's not typical for government in Russia ;) Also it helps that people are locked in country by western countries, so many stays in country and drives the economy.
- nazgob 9mo agoSituation in EU is worse than Russia? In what way?
- DrProtic 9mo agoRussia has 2.2% unemployment Germany has 6.3% Spain 9.9% France 7.9% All while having millions of foreigners/immigrants to support.
- JKCalhoun 9mo agoBased on the article, I assume Russian employment is in the military complex?
- red-iron-pine 8mo agocorrect. they've mostly shifted to a militarized economy and all available labor is now gobbled up. salaries are pretty good, relatively speaking, if you're in engineering or other STEM fields. excess labor is being drained off to die horribly to drones in eastern Ukraine. it's kind of like a fat guy starving to death -- for a minute all that weight loss will bring improvements to blood pressure, insulin, etc., but in a couple weeks he's not gonna feel so great
- pavel_lishin 9mo ago> If your competitors are also weakening—and if you believe you can tolerate the pain longer than they can—the calculus flips. Economic pressure that should drive compromise instead reinforces the logic of persistence. I think everyone underestimates just how much misery Russia, and Russian citizens, can endure.
- wuschel 9mo agoI think the problem is that there is not much data presented in this article - or other articles of that kind. Systems are resilient - until they are not, and exhibit sudden factures and fast collapse. The question is not whether Russia collapses or not, but who would be making profit from such a scenario, and who is keen on keeping the current state of affairs.
- shevy-java 9mo agoYes. A few get rich. This has always been the case - see Smedley Butler's old analysis about this.
- ivan_gammel 9mo agoRussia is a glimpse into the future of America if nothing changes substantially in American political system. It’s a digital surveillance state, an oligarchy which co-opted technocratic elites into a ruling class and exploits mildly oppressed population without going to extremes. It has the technology and resources to maintain status quo for a very long time and absorb moderate shocks like this war.
- wiseowise 9mo agoOn top of that current Russia isn’t actually “suffering”, certainly nowhere near 90s levels. Cheap crap from Russia replaced Western produce and those with money can buy grey goods. Putin is doing a “good” job insulating general population from the war.
- twelve40 9mo agolol you can call it crap if it makes you feel better, but McDonalds was replaced by the same vendors, making the same stuff sourced mostly locally as before, using the same processes that McDonalds used, they just don't send their revenue to the US anymore. Same for Ikea (majority of stuff sold at Ikea was sourced locally and continues under local brands), same for Starbucks - Shokoladnitsa is subjectively better and keeps all the $$ locally, but whatever. The level of myths and delusions people confidently post here on this topic is truly impressive.
- shevy-java 9mo agoSo several sources report this. I assume this may be more "realistic" than in the last 3 years ago or so. My problem with this is that many of these "news media" have a certain propaganda spin. Yes, Russia's propaganda puts any other propaganda to shame, but that does not mean others don't use propaganda either. The most prevalent change is how suddenly in Europe, more debt will be made by upgrading arms. I am not saying this is not understandable, so I am not necessarily against that; in fact, Europeans need a nuclear arsenal under EU control anyway. But at the same time one should not blindly adopt propaganda used by others. One always has to look what happens to taxpayer's money or who finances something.
- sigmonsays 9mo agowhat does this do to the Russian citizens? is cost of everything going up to ridiculous levels?
- ivan_gammel 9mo agoRussia‘s international reserves are at all time high at the moment (800B$), of which only 300B are frozen by sanctions. Doesn’t look like a sign of a death zone. The arguments for it are questionable: >Consider the arithmetics of descent for the Kremlin. Russia’s defence sector now accounts for around 8% of GDP. Demobilising without falling into a crisis would require five conditions to be met simultaneously: credible security guarantees that satisfy the Kremlin’s threat perceptions (which in turn will determine the extent to which it rebuilds its military capabilities); Likely result of a peace deal. Trump wants to sign it and focus on China, so some pragmatic arrangement to be expected. > mass demobilisation with effective retraining programmes; The easiest part. The scale of mobilization was relatively small compared to total workforce. Not sure why effective retraining sounds like a problem. >at least partial sanctions relief for technology access; Russia has gaps in electronics (can buy from China) and in aviation (sanctions likely to be lifted in exchange for opening transit routes). In software it is still ahead of Europe, having strong national players in AI, banking, marketplaces etc. It may need Western tech to roll out 5G, but given that they already plan it, they probably already have access to Chinese tech. >a revolution in defence procurement that prioritises efficiency over budget absorption; Not clear why this is relevant. The defense spending will wind down gradually, it is likely already more efficient than before the war. > and a healthy ecosystem of small and mid-size firms capable of absorbing reallocated resources and boosting innovation. Will likely happen as soon as tax relief will be affordable, i.e. in 1 or 2 years after the peace deal. Resilience of Russian SMEs is something developed over decades. It might happen that Dubai and South Caucasus Russian tech hubs will go home. Most importantly, there will be a huge amount of money spent on new territories similarly to infrastructure investments in Crimea, which will add few percentage of growth to GDP. > The probability of all five converging is near zero. This is the most interesting part of the article, but it left unexplained. Why?
- samiv 9mo agoSame story for 4 years long. "Russian economy is at the brink of a collapse." Yet it Somehow just keeps ok going year after year. The truth is that the sanctions are only hurting the Eurozone more than Russia. Small minority (EU or the political west) cannot force meaningful sanctions on much larger group (BRICS). Unfortunately this is not the narrative anyone can say out loud lest they be labeled as "Putin's trolls" so the wishy-washy keeps on going on.
- wiseowise 9mo agoHow do you think sanctions work? Economy is not powered by electricity, it took 4 years to crack down on their shadow fleet, God knows how many more escape hatches they have. China and India, and now US support them.
- samiv 9mo ago"China and India" this is the point exactly. BRICS is the largest economic union in the world. They don't need EU for anything therefore the sanctions are only self harming the Eurozone. This is the reality.
- wiseowise 9mo ago$20T and $4.5T economies that hate each other don't need $22.5T economic major power. Yeah, yeah, cool story. Tell me more of those exciting stories.
- gzread 9mo agoCitation please?
- tclover 9mo agoIt’s interesting, of course, but for example the Ukrainian budget depends on donations for about 60%, yet this dump doesn’t seem to rush to publish articles with equally loud headlines about Ukraine. Or about the US with its trillions in debt, or the UK, France, and most EU countries with huge debts exceeding their annual GDP.
- duxup 9mo agoThey managed to insulate their economy surprisingly well so far. Not that it is "good" but it also didn't tank entirely. I'm skeptical how close they are to a dramatic change.
- O1111OOO 9mo agoI wonder if the end of Russia as a world threat is something that benefits or hurts the US. The US runs a trillion dollar war machine, a multi-trillion dollar military industrial complex. It needs to feed it. It needs enemies. At the very least, it needs a constant threat to justify its existence (even if it has to create those threats). If Russia ceases to be a threat, does the US begin to hassle more countries? Does it increase the Police State, does domestic surveillance become more prevalent. Are we already seeing these things? A legitimate Russian threat might actually be good for the world and the American people.
- zombot 8mo ago> even if it has to create those threats The US is great at creating its own threats. In addition, marketing chops are top tier, and Hollywood is always glad to help.
- O1111OOO 8mo agoExactly. The War Machine may very well be too big to fail. It's connected to every facet of life as we know it... (today).
- tim333 8mo agoThe US as a whole gets little benefit from spending a fortune on the military. It would probably be better off. That said there's still China.
- Haven880 9mo agoThe only way is just to cede the land and move on. Keep the people alive. 100 years later one can renegotiate. This kind of copium hope wishing the economy collapse or something like Mongol collapse is just not practical. The longer this drag on, the lesser fertile men exist in Ukraine and the population recovery will take even longer while Russian outbirth in the long run. Sometime to win one has to abide by time. Joan or Arc and King Goujian of Yue demonstrated that principle well either by divine intervention or human vengeance. Russia is doing very well. You can check with your Russians or Northern China friends that see the conditions with their eyes and not western propaganda.
- TiredOfLife 9mo agoThey already ceded huge amount of land in 2014. And 8 years later russia invaded again.
- drysine 8mo agoNo, the Ukraine didn't cede anything. They cut water and electricity to Crimea to punish Crimeans and they were building up the army with Western help.
- TiredOfLife 8mo agoWhat you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone on this site is now dumber for having read it.
- don_esteban 8mo agoCare to substantiate your rambling incoherent response?
- tim333 8mo agoThey don't just want land though. They want 'denazification' which means overthrowing the government and making it like Belarus or Bucha. I think the way is to support Ukraine to win rather than the 'escalation management' of Biden or the taking bribes to pressure Ukraine to surrender of Trump. They are not doing so badly recently. 200 sq km taken back last week.
- rich_sasha 9mo agoI would add that it's really unclear, IMO, what the real state of the Russian economy is. The main focus is on GDP growth, which indeed has been reported as decent - maybe a bit of a wobble recently but no more. So, first of all, that number is kind of unverifiable. Hostile journalists have been silenced, independent institutions shattered or kicked out. Their GDP number might be accurate, but might also be inflated, and we'd never know. Russia is notorious for manipulating information for propaganda reasons and frankly I can't see why they wouldn't inflate their GDP prints. China was far more open when people were questioning its GDP and even then it was tea leaf prophecies. Moreover, with Putin's (and incidentally Trump's) approach of never retreating and always doubling down, I'd expect Russia would act like it's business as usual until pretty much the day it collapses. As with the Titan sub, there will be some awkward creaking sounds then in one instant it will all go. For the final straw, even if the GDP number is 100% right, increasingly it is driven by military spending. GDP is essentially the sum total of money spent in a country. And Russia is increasingly spending that money not on healthcare, schools, police, infrastructure and investments, and instead on military hardware being sent straight to be destroyed in Ukraine. You can do this for a little bit but, as the article points out, not forever, and mere GDP growth is not much of a sign of a strong economy. There's just so much we don't know: if the GDP is real, what Russian gold reserves look like (apparently raided - but how much?), how their oil companies are holding up having siphoned every last Rouble meant for maintenance off to cash. Russia also lost something like an estimated 1.25M men. If for a back-of-the-envelope we assume half of Russia's prewar population is participating in labour force, that's almost 2% of the workforce permanently lost. And their loss rate ain't dropping. EDIT some more caveats: - GDP captures the official economy. It is unclear what the impact on the unofficial economy is, I can imagine larger than on the regular economy (but could make the opposite argument too). - Even if Russia is not fudhing the final number, the incentives on individual surveyed subjects align with those of pumping GDP, especially in time of crisis - lower costs, higher income.
- francescomi 8mo agoI live in Dubai, UAE and I can see with my own eyes that the sanctions strategy doesn't work, here Russians buy whathever they like and send it to Russia. There are companies that do this. They hire workers from poor countries promising a good life here in Dubai and they send them in Ukraine to fight. To fight agains Russia we need to attack every nations that have deals with Russia. Let's sanction everyone who makes deals with Russia, let's really block everything that goes to Russia and then maybe the Russian economy with crash
- drysine 8mo ago>They hire workers from poor countries promising a good life here in Dubai and they send them in Ukraine to fight. Really?
- valcker 8mo agoI live in France, and there’s no shortage of wealthy Russian tourists here, just like there’s always been.
- franktankbank 8mo agoWhy would you live there?
- tim333 8mo agoIt's popular with Brits. Sun and no tax mostly.