Latest articles and blogs
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High oil prices help, but won’t solve, Russia’s economic troubles
With the gyrating, generally upward trend in crude oil prices since the outbreak of the Iran war, oil price trends – particularly their impacts on Russian economic output and government finances – deserve consideration.
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Russian budget framework for 2026‒2028 foresees tax hikes and lots of red ink
The latest preliminary budget framework approved by the Russian government suggests a tightening of the government’s fiscal stance. The large war deficits of recent years have complicated Russia’s finances, forcing the government to harness all parts of the economy to finance the war effort.
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War has degraded Russia’s long-term economic outlook and business environment
Russia’s decision to start a war in Ukraine has eroded its economic growth potential and deteriorated its business environment. These problems will remain long after sanctions are lifted.
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Falling oil prices reduce Russia’s budget revenues
Russia’s government finances are very sensitive to changes in global oil prices. Last year, oil & gas earnings accounted for about 30 % of total federal revenues and 16 % of consolidated government revenues.
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Russia’s GDP growth reflects military spending, not economic strength
Although Russia’s output growth has slowed in recent months, the official preliminary estimate puts third-quarter on-year GDP growth at 3 %. We should not put too much emphasis on the exact number due the heightened uncertainty of Russian statistics since the invasion of Ukraine.
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Russia further increases military expenditure at the expense of other financing needs
The above headline aptly summarizes the preliminary 2025–2027 budget framework submitted to the Duma in late September.
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The collapse of trade with Russia has had a limited effect on Finnish manufacturing
The discontinuation of trade with Russia has not had a major impact on Finland’s economy as a whole. The collapse of exports to Russia has not reduced overall exports in the case of many goods, because exports to other countries have increased.
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Military dominance increases imbalances in the Russian economy
Russia’s future growth potential and living conditions are eroded by government spending and investment focused on war-related production and infrastructure.
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G7 countries prepare to discuss Russia trade sanctions
A wide coalition of countries have imposed economic sanctions on Russia for its brutal aggression against Ukraine. The sanctions regime has impaired – but not exhausted – Russia’s financial and technological ability to make war.
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Russia’s economy after a year of war and sanctions
Key aims of the sanctions are to limit its financial and military capabilities to wage war.
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Impending EU sanctions could badly hit Russia’s oil revenues
Russia’s oil exports have decreased only marginally in volume since it began the war in Ukraine. While the export volume to countries of the European Union has fallen somewhat, Russia has found new markets in India, China and Türkiye.
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War’s price tag for Russia will be high
Russia’s war in Ukraine is, above all, a massive human tragedy and an assault on Ukraine’s economy and society. But Russia, too, will end up paying a high price for its cruel decision to wage war.