Russia Faces Economic Crisis Amid Oil Price Declines, Rising Debt

Internal documents from Russia's economy ministry and central bank reveal significant economic risks stemming from declining oil prices, budget constraints, and rising corporate debt. With OPEC's free production capacity nearing historical peaks, there's a looming threat that increased U.S. oil output could further depress global oil prices, critically impacting Russia's fiscal stability. The reports indicate that high interest rates, expected to remain at 21%, are stifling investment and lending, which could lead to a technical recession. Additionally, the ongoing war in Ukraine and Western sanctions have exacerbated these fiscal challenges, contributing to weakened consumer spending and lower GDP growth forecasts. Russian officials have publicly portrayed a resilient economy, but internal assessments highlight the precarious balance between inflation, interest rates, and economic growth. As challenges mount, the reliance on energy exports remains a double-edged sword for Russia's financial future.