Russia’s Economy is Tanking
Author: Greg Valliere
August 21, 2025
JUST AS THE OLD SOVIET UNION crumbled as its economy collapsed, Russia’s economy is close to recession now, as high taxes and rising inflation make a huge dent.
YET VLADIMIR PUTIN CONTINUES TO SPEND in his disastrous war. American and European officials said during this week’s summits that Russia may spend even more on air support and other security expenses.
THIS YEAR’S RUSSIAN GDP is expected to grow at roughly zero percent, thanks to failing exports, sluggish coal and auto production.
PERHAPS THE MOST DISASTROUS economic development is the flood of highly educated young people, who have fled Russia for the West and the Persian Gulf, which offer good paying jobs and relatively low taxes.
EXPERTS WE SPOKE WITH yesterday were not hopeful that the war will end quickly. Winter is coming, and despite good intentions in Europe, the corrupt and sluggish Russian army continues to grind slowly toward the West.
A TRUCE, these experts say, is unlikely. Russia won’t budge, its population is unwilling to negotiate, and Putin has his sights on other countries in the region.
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