'Putin's Mirage': CNN on Signs of the Collapse of the Russian Economy.

The Gradual Disappearance of Russia's Mirage of Power

According to media reports, Vladimir Putin continuously confirms Russia's military might, but all these indicators are acquired through stimulation. CNN reports that ahead of the third anniversary of the start of the war in Ukraine, the truth about the actual state of the country's economy is being revealed.

Economic analysts have predicted that Russia's artificial economic growth will inevitably slide into a path of difficulties. Even Russian officials acknowledge that the economy is on the verge of exhausting its capabilities, causing rising prices and economic hardships.

Some analysts predict that economic problems will force Putin to the negotiating table sooner than expected. Easing anti-Russian sanctions may become a valuable currency for exchange.

The Kremlin uses a tactic of 'reflexive control' to influence Ukraine's allies. Currently, Russia is trying to convince Kyiv's allies of its economic might and its ability to finance the war. This in turn forces Ukraine to act in favor of Russia.

A new study by Craig Kennedy from Harvard University indicates that the Kremlin is hiding the true costs of the war by using 'shadow' financing mechanisms. According to Kennedy's estimates, despite the stable level of Russia's defense budget, there is an increase in corporate loans that are actually state expenditures. The state compels banks to provide preferential loans to companies associated with military orders.

This financial approach creates risks for the banking system and may lead to the bankruptcy of firms involved in the defense sector. A banking crisis may cease to be a mere notion and spiral into a panic among Russians who will start withdrawing money from their bank accounts.

The IMF forecasts a slow decline in Russia's economic growth rate until 2025 and an increase in inflation. Sanctions and economic difficulties also undermine the social contract in Russia. Financing the war while simultaneously maintaining economic stability is an exorbitant burden on the country and may soon lead to serious problems.