The cost to Russia’s economy of the ongoing war in Ukraine has been laid bare by the UK intelligence.
High interest rates and soaring inflation will make it difficult for Vladimir Putin to sustain his current levels of military spending, according to the Ministry of Defence (MoD).
In their latest update on the conflict, which began with Russia’s invasion more than three years ago, they said interest rates in the country are at a staggering 21% – their highest level in more than 20 years. Before the war, they were at 8.5%.
Inflation, meanwhile, is at 10.1% – way above the Central Bank of Russia’s target of 4%.
In addition, the value of the ruble has risen against the US dollar, making Russian oil and gas exports more expensive and increasing the country’s deficit.
The MoD said: “Labour shortages, alongside high levels of government spending, almost certainly mean inflation will remain above the CBR’s target through 2025.
“Long term inflationary pressure will highly likely exacerbate pressures on Russia’s ability to sustain high defence spending.”
The MoD update comes as Donald Trump’s efforts to keep his election pledge to end the war continue to be unsuccessful.
The US president did manage to secure partial ceasefires in the Black Sea and against Ukrainian energy infrastructure – but both sides now claim that brief truce has already been broken.