Russia’s elites are warning of mass bankruptcies as a result of Russia’s economic meltdown. (Image: Getty)
Tensions have reportedly erupted among Russia’s elite due to the heavy toll of sanctions on the economy as is issued a dire warning about impending bankruptcies.
Business moguls are increasingly voicing concerns that central bank rate hikes aimed at taming spiralling inflation a direct result of sanctions and Putin’s lavish wartime expenditure could grind economic activity to a standstill in the coming year.
Amid anticipation of further increases by the central bank this month, even Putin’s typically mute inner circle have escalated their criticism of policies maintaining the key rate at 21%.
Insiders warn of potential bankruptcy waves, potentially striking , which is experiencing a production boom to support the conflict.
Boris Kovalchuk, who runs the nation’s financial regulatory body and is a close ally of Putin, cautioned on that the escalation of was “limiting the investment possibilities of business and leading to a growth in federal budget spending”.
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The Russian ruble recently plunged to its lowest since the immediate aftermath of the war. (Image: Getty)
Igor Sechin, one of Putin’s close associates and the chief of oil behemoth Rosneft, criticised the central bank in the firm’s quarterly earnings release.
He said affecting the company’s financing costs, as well as those of its contractors and suppliers, thereby diminishing profits.
Sergei Chemezov, another of the president’s allies and the head of ‘s state defence enterprise RosTec, issued a stark warning that if persisted at their current levels, “practically a majority of our enterprises will go bankrupt”.
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Steel tycoon Alexei Mordashov added: “It is more profitable for companies to stop development, even reduce the scale of business and put funds on deposit, than to conduct business and bear the risks associated with it.”
The central bank has already projected a , anticipating it to dwindle to between 0.5 and 1.5% next year.
Stringent new US sanctions on 50 Russian financial institutions have escalated transaction costs for Russian traders and recently sent the ruble tumbling to its weakest point since the onset of ‘s invasion of in 2022.