Russia's fiscal position is deteriorating fast, and the numbers tell a clear story. Long-dated bond yields on 10 and 20-year bonds have spiked to nearly 17%, a Signal that investor confidence is cracking.
Two main drivers sit behind this. First, a recent drop in global oil prices following a US-Iran peace deal has hit Russia's revenue base hard. Second, a new law allowing the Kremlin to bypass debt ceilings has spooked markets.
The structural picture is worse. Sanctions lock Russia out of international borrowing, forcing it to rely on a shrinking pool of domestic lenders. Russian citizens are withdrawing cash from banks at record rates. The war-related budget deficit is on track to reach 5-6% of GDP.
While a near-term default seems unlikely, the pressure is real. The Kremlin is being forced into tax hikes and cuts to non-war spending, which will squeeze ordinary Russians further. Combined with the ongoing conflict, this economic strain is expected to ramp up domestic pressure on Putin.
It is a reminder that economic reality eventually catches up with even the most insulated regimes. The real question is how that pressure manifests politically, and whether it shifts the calculus of the war.
https://www.youtube.com/watch?v=bTVc3QTWVZI
#Russia #Putin #Economy #Geopolitics #Sanctions #OilPrices #BondYields #WarEconomics
Two main drivers sit behind this. First, a recent drop in global oil prices following a US-Iran peace deal has hit Russia's revenue base hard. Second, a new law allowing the Kremlin to bypass debt ceilings has spooked markets.
The structural picture is worse. Sanctions lock Russia out of international borrowing, forcing it to rely on a shrinking pool of domestic lenders. Russian citizens are withdrawing cash from banks at record rates. The war-related budget deficit is on track to reach 5-6% of GDP.
While a near-term default seems unlikely, the pressure is real. The Kremlin is being forced into tax hikes and cuts to non-war spending, which will squeeze ordinary Russians further. Combined with the ongoing conflict, this economic strain is expected to ramp up domestic pressure on Putin.
It is a reminder that economic reality eventually catches up with even the most insulated regimes. The real question is how that pressure manifests politically, and whether it shifts the calculus of the war.
https://www.youtube.com/watch?v=bTVc3QTWVZI
#Russia #Putin #Economy #Geopolitics #Sanctions #OilPrices #BondYields #WarEconomics