The Russian war economy is facing a 'moment of truth' as Putin's dwindling cash reserves raise odds of a financial crash

Russia's economy is facing a "moment of truth" as high inflation, an ailing private sector, and critical shortages are poised to constrain Vladimir Putin's war on Ukraine, according to economist and author Anders Åslund.

Nearly three years after launching its invasion, Russia is headed for stagflation, meaning high inflation combined with minimal growth, he wrote in Project Syndicate on Jan. 14.

While official statistics show inflation quickened to an annual pace of 9.5% in December from 8.9% in November, alternate measures suggest it's far higher. For example, independent research firm ROMIR has calculated that prices for a basket of certain consumer goods jumped by 22% in September.

"His war on Ukraine has caused both high and rising prices and labor shortages, because many workers have been mobilized or killed, while many others have fled the country," Åslund, who wrote Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy, said.

https://www.msn.com/en-us/money/markets/the-russian-war-economy-is-facing-a-moment-of-truth-as-putin-s-dwindling-cash-reserves-raise-odds-of-a-financial-crash-expert-says/ar-AA1xUiHo