Russia weighs how to prop up Russian Railways, which is $51 billion in debt, sources say.
The sheer scale of the debt is staggering, isn’t it? Russian Railways, a key player in the country’s economy and its biggest commercial employer, is reportedly drowning in about 4 trillion roubles, which translates to a whopping $50.8 billion. That’s a huge sum for a railway network, and it’s forcing the powers that be to scramble for solutions. It makes you wonder how such a seemingly essential service accumulates such a burden. You’d think the efficient transport of goods would be a reliable revenue stream, but clearly, the reality is far more complex.… Continue reading
Russia’s oil and gas revenue is anticipated to decrease by approximately 35% in November compared to the previous year, reaching roughly $6.6 billion, due to weaker crude prices and a stronger ruble. This decline, also reflected in a 7.4% decrease from October, places pressure on Russia’s budget, especially with elevated defense spending. For the first 11 months of 2025, oil and gas revenue is projected to total approximately $102 billion. Western sanctions, designed to limit Moscow’s war funding, have compounded the issue.
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President Putin has downplayed concerns about Russia’s slowing economic growth, attributing it to a deliberate effort to curb inflation and maintain macroeconomic stability, despite expectations of a slowdown from 4.3% to around 1% GDP growth. This stance echoes similar comments from the Central Bank Governor, who denies the existence of a recession, although data suggests a technical recession based on quarterly GDP declines. However, this contradicts prior statements from Russia’s Economic Minister as well as reports suggesting the government is considering increasing the value-added tax to manage its budget deficit and preserve reserves, potentially conflicting with Putin’s previous tax assurances.
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Ukrainian drones strike one of Russia’s biggest refineries, and it seems the hits just keep on coming. Reports indicate that Ukraine recently targeted the Kirishi refinery in Russia’s Leningrad Oblast. This isn’t just any old facility; it’s one of Russia’s major oil refineries, accounting for a significant chunk – roughly 6.4% – of their refining capacity. The strategic importance of such strikes is undeniable, as they directly impact Russia’s ability to produce and supply petroleum products.
Following the attacks, initial reports from Russia claimed that three drones were successfully neutralized, with debris from one causing a fire. Fortunately, there were no reported injuries, and the fire was quickly extinguished.… Continue reading
Russia’s Putin denies economy is stagnating, as evidence suggests otherwise, and this is a narrative that feels increasingly familiar. It’s like a broken record, where the leader insists everything is fine while the facts on the ground tell a different story. The similarities between this and certain situations in the US are striking. It seems the denial of economic realities has become a common tactic in some leadership circles.
The current economic situation is, frankly, concerning. Reports indicate that Russia is planning to significantly increase its borrowing, likely to offset the massive government spending. This spending is, at least in part, propping up the economy, so without it, things could get much worse, and rapidly.… Continue reading
Russia’s economic growth has sharply decelerated, entering a phase of “technical stagnation” from April-June 2025, according to Sberbank’s head, German Gref. This slowdown, driven by record defense spending, is hampered by weak private consumption and shrinking civilian investment, with the Central Bank expecting near-zero growth in late 2025. Economy Minister Maxim Reshetnikov noted a concerning trend of underutilized factories and cost optimization, along with a July GDP growth of 0.4%, indicating insufficient demand. High inflation and the Central Bank’s key interest rate are contributing to a challenging economic situation, reflecting the limits of Russia’s war-fueled expansion.
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A report from Ukraine’s Foreign Intelligence Service indicates that numerous Russian regions are experiencing significant shortfalls in meeting their budget revenue targets, with many running deficit budgets. Kemerovo Oblast’s deficit has already surpassed projections, while Bashkortostan’s deficit has doubled the planned level. The Republic of Sakha, Yakutia, has also seen massive overspending, and Rostov Oblast is facing a substantial deficit despite initially planning for a surplus. These financial woes are attributed to Western sanctions impacting key industries like coal and a surge in one-off payments to volunteer soldiers.
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Despite initial resilience fueled by military spending and oil exports, the Russian economy is now facing a downturn. Manufacturing is contracting, consumer spending is down, and inflation remains high, straining the national budget. Experts warn that the economy’s reliance on military spending is unsustainable, and Western sanctions are increasingly taking a toll. This economic strain is reducing Russia’s ability to fund the war in Ukraine, with falling oil prices adding further risk to the situation.
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Sberbank CEO German Gref has warned of significant economic challenges ahead for Russia, predicting difficulties stemming from military spending, inflation, and high interest rates that could extend into 2026. The quality of loan portfolios is declining, with increasing requests for debt restructuring from borrowers. Bloomberg reports a growing risk of a banking crisis within the next year, citing a surge in defaults not yet reflected in official statistics. Corporate debt has risen substantially, particularly among Russia’s largest companies, and mutual non-payments between companies are also increasing.
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A Follow the Money investigation reveals that Western companies paid Russia at least €40 billion in taxes over the past three years, a sum nearing one-third of Russia’s 2025 defense budget. This significant revenue stream, primarily from G7 and EU firms, directly supports Russia’s war effort despite Western sanctions and military aid to Ukraine. Many companies, citing various justifications, remain in Russia, despite challenges to exiting the market, including low asset sale prices and potential asset seizures. While Russia’s rhetoric suggests punitive measures against these companies, the Kremlin also indicates plans for their eventual return.
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Matt Underwood 
John Q. Hosedrinker