A report released this week from a state-run economic think tank in Moscow has warned Russia is teetering on the brink of a severe economic downturn due to a triple threat of financial indicators that could trigger a banking crisis.
Stemming from various factors exacerbated by Russian President Vladimir Putin's invasion of Ukraine in 2022, the Kremlin-linked Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) is warning of a "resonance" of deleterious economic indicators. A combination of increased bad debts, early signs of a bank run by depositors, and increased pressure on both businesses and consumers in the form of higher interest rates.
"A systemic banking crisis, as defined by CMASF, would involve at least one of three conditions: non-performing loans exceeding 10% of total banking assets, a significant withdrawal of funds by depositors, or large-scale bank recapitalizations exceeding 2% of the country's GDP," the Moscow Times reported this week.
The news of Russia's economic fragility comes right as President Donald Trump has lost patience with Putin over his reluctance to seek a meaningful ceasefire agreement.
Last weekend, Russia launched additional drone and missile strikes on Ukraine, escalating the conflict and pushing the already fragile peace talks further out of reach. U.S. and other Western nations have now proposed secondary sanctions against Russia and those who buy Russian oil to squeeze the economy.
Trump has resisted implementing secondary sanctions and instead prefers to have Putin come to the negotiating table without the additional threat. "Only the fact that if I think I'm close to getting a deal," the president told reporters in the Oval Office on Wednesday when asked what was stopping him from hitting Moscow with new sanctions. "I don't want to screw it up by doing that. You have to know when to use that."
Trump blasted Putin with his most personal attack to date posting on his Truth Social platform following the attacks that Putin had gone "absolutely crazy!" Yet the president appears eager to use the floundering Russian economy as a negotiating tool to bring the war to an end.
"Russia wants to do largescale TRADE with the United States when this catastrophic ‘bloodbath' is over, and I agree," Trump said in a statement after a phone call with Putin. "There is a tremendous opportunity for Russia to create massive amounts of jobs and wealth. Its potential is UNLIMITED," Trump posted Friday.
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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