The Economy of the Russian Federation in January – April 2024

Based on the analysis of a number of macroeconomic and sectoral indicators, it is established that in January–April 2024, there was an economic decline compared to the corresponding period in 2023. Moreover, the extent of the decline is increasing month by month. It is noteworthy that the authorities, as in the past in the USSR, are turning a blind eye to the decline. The causes of the decline are determined by the combined impact of both cyclical factors (Western economic sanctions, overstrain from military expenditures) and long-term trends of a decline in fixed assets and a reduction in the workforce, as well as the qualifications of personnel at all levels. The future prospects of the Russian economy are determined, along with ensuring effective economic policy and building a functional state system, by the level of escalation of the conflict in Ukraine and the extent of economic sanctions. In the event of significant escalation of military actions, what will be required is a transition to a wartime economy with a high share of military expenditures in GDP, a reduction in consumer spending and non-productive investments, mobilization of labor resources in favor of the armed forces and the military-industrial complex, and the introduction of a rationing system for main food products, as well as the nationalization of several companies. The success of this structural maneuver is determined by the organization and qualifications of the state apparatus. In the case of moderate escalation of military actions and economic sanctions, the radical nature of structural and institutional changes will decrease.