"Butt on the ice" or about the forecasts of the Russian economy
The noise of the media and some officials who rush to quote the FT, The Economist, WSJ and Reuters, who noticed in April-May that the Russian economy was in trouble, is very annoying. I predicted in early December 2024 that the Kremlin has six months before financial difficulties begin.
I was wrong by 1-1.5 months, the crisis signs started earlier:
- Growing budget deficit;
- Decline in almost all sectors of the economy except for the military-industrial complex and IT;
- Signs of manipulation of the GDP deflator;
- Closure of mines in Kuzbass and the beginning of the budget crisis in the regions;
- Signs of additional issue through repo with banks.
This is just a small list of the progressive disease that will worsen as Russian oil prices decline. All of this was visible six months before the events, but the West has only now seen it. They are reflecting on the official reports of the lying Russian authorities and the "average temperature in the hospital".
In my opinion, the best prognosticator of the Russian economy is its insider, the sanctioned Russian oligarch Oleg Deripaska, who in November 2023 compared the situation with budget revenues for 2024 to hitting "ass on ice.".
He was also wrong by about a year: he probably felt a significant deterioration, but he did not assume a certain inertia of the commodity economy. Plus, he was motivated to stop the crisis to prevent personal losses.
Looking to the future, the crisis in the Russian economy has already deepened its metastases far beyond the public finance sector and the Western media's reflection on this fact.
In many sectors and regions, the situation is so critical that when I am asked what my forecast for inflation and GDP in Russia for 2026 is, I answer that in order to make such forecasts, one must be sure that this Russian Federation will exist in its current form in 2026.