President Donald Trump has announced potential new economic sanctions against Russia, signaling a strategic shift in U.S. policy toward Moscow. This move comes as reports indicate that the Russian economy is facing severe challenges, with predictions that it could run out of cash by the end of the year if stricter sanctions are imposed.
Recent analyses reveal that inflation in Russia is soaring, with annual rates nearing 10%. Essential goods are becoming increasingly unaffordable, with milk and dairy products experiencing inflation near 20%, and fruits and vegetables seeing price hikes of approximately 30%. The economic strain is largely felt by ordinary citizens, as the Russian government struggles to control rising prices.
Interest rates in Russia have surged to an unprecedented 21%, limiting access to credit for both individuals and businesses. This has led to a significant decline in lending activity, exacerbated by the exit of over 1,000 multinational companies from the Russian market. The economic environment has become so challenging that remaining firms are unable to hire workers, further crippling the economy.
Trump's approach contrasts with the previous administration's hesitance to impose tougher sanctions due to fears of global inflation. Analysts argue that the global economy can manage without Russian commodities, which constitute less than 10% of global supply. The Russian government has relied heavily on oil sales to sustain its economy, but the depletion of its sovereign wealth fund and foreign exchange reserves poses a serious threat to its financial stability.
If Trump moves forward with sanctions targeting Russia's oil profits, experts suggest that it could precipitate a financial crisis for President Vladimir Putin, potentially forcing him to negotiate for relief by the end of the year.