War threatens to overheat Russian economy – British intelligence
The Russian Federation saw a rise in inflation to 6% in September from 5.3% in August 2023, driven by a jump in consumer prices, especially for food and fuel. This is likely to result in more expensive financing for Russia's war against Ukraine.
The British Ministry of Defense reported this on the X social network (formerly Twitter) with reference to intelligence data.
In response to rising inflation, the Central Bank of Russia (CBRF) raised the base interest rate by two percentage points to a new base rate of 15%.
These are the highest figures since May 2022, experts of the British Ministry of Defense note.
Analysts stressed that it is likely that the Central Bank of the Russian Federation will keep interest rates high until 2024, which will likely increase the cost of borrowing for Russian consumers and likely affect the Russian government's debt servicing costs.
Latest Defence Intelligence update on the situation in Ukraine – 06 November 2023.
Find out more about Defence Intelligence's use of language: https://t.co/Ih0STkVeQ9
🇺🇦 #StandWithUkraine 🇺🇦 pic.twitter.com/IUieH414LU
— Ministry of Defence 🇬🇧 (@DefenceHQ) November 6, 2023
In addition, the Russian economy is likely to be at risk of "overheating" due to rising demand, in part due to a significant increase in defense spending, as well as constant pressure from an increasingly tight labor market, the summary said.
"This is highly likely to ensure inflation in Russia in 2024 remains above the target rate of 4 percent. Continued high inflation is likely to erode real terms government spending, particularly in areas such as social care with below-inflation spending rises," the British intelligence noted.
According to the results of the Ministry of Defense of Britain, this once again illustrates the reorientation of the Russian economy, first of all, to instigate a war against Ukraine.
For reference:
As reported by Rubryka in a preliminary briefing, British intelligence talked about problems with arranging the living conditions of Russian troops at the front in Ukraine.
It was reported by British intelligence that in the past three weeks, during the attack of Avdiivka in the Donetsk region, the Russian invaders have lost around 200 armored vehicles.
Also, British intelligence officers claim that in the Donetsk region, active assaults by occupation forces in the Avdiivka area led to a 90% increase in losses in the Russian army in the war against Ukraine.
