hello. This is your Russia-Ukraine War Briefing, your weeknight guide to the latest news and analysis on the conflict.
Russian economy shrinks
In the first snapshot to fully capture the cost of Russia’s war, data released today showed that GDP fell 4% year-on-year from April to June.
Even though imports have dried up and sanctions to the point of defaulting on foreign debt have hampered financial transactions, the GDP drop has not been as severe as some had predicted.
This was because the state coffers were flooded with energy revenues as prices rose due to the war. However, the economic blow is expected to grow heavier over time as the West turns its back on Russian oil and gas, a key source of export revenue.
Western sanctions have caused the outflow of hundreds of Western companies, cut Russia off from about half of its $600 billion foreign exchange and gold reserves, and imposed severe restrictions on transactions with Russian banks.
In the days following the invasion, Russia acted quickly to mitigate the impact of sanctions, and to some extent was able to soften the blow. He said he does not expect growth to return until 2020.
The outlook for the next few months looks bleak. Russian companies will have to reorganize their supply chains as imports plateau and companies struggle to get replacement parts for Western-made machines.
The outlook for the energy sector is also weakening. Oil production will drop further next year, and Russia will have to find buyers for about 20% of its oil.
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Russian loss
Russia has not released the death toll from a mysterious explosion at an air force base in Crimea this week, but a senior Ukrainian official said today that the blast killed about 60 pilots and technicians and injured 100 others. Stated.
Anton Gerashchenko, an adviser to the interior minister, said the conclusions were based on video evidence and intelligence data, but did not give details.
Russia’s leadership expected a quick war victory when it was invaded in February, but has given dubious accounts of military losses in the conflict, now in its sixth month.
When the Moscow, the flagship of Russia’s Black Sea Fleet, sank in April, US intelligence confirmed that two Ukrainian missiles hit the ship, killing an unknown number of sailors. However, Russia claimed that an accidental fire was the cause of the sinking. This was the navy’s biggest loss in her 40 years.
The Kremlin’s tendency to underestimate battlefield losses is a deeply ingrained behavior spanning decades.
For example, the official military casualties of Russia’s disastrous First War in Chechnya in the 1990s are almost 6,000. Most independent estimates put the actual figure at probably more than double that number.
Russia has not released figures on the number of casualties suffered in Ukraine since March, when it said 1,351 soldiers had died.
Similarly, Ukraine does not disclose official tolls. The government said that between 100 and 200 troops were killed each day during the height of the Battle of Sheviero Donetsk in June.
According to US intelligence, Russian losses were staggering, with about 20,000 soldiers dead, reports my colleague Helen Cooper.
Of that number, 5,000 are believed to be mercenaries of the Wagner Group.
Some comparisons to get an overview of the figure:
High casualties mean slow progress for Russia, which draws troops from the Far East and around the world and has already committed nearly 85% of its field forces to the war.
“Russian forces are seriously depleted,” said Seth G. Jones, director of the International Security Program at the Center for Strategic and International Studies. “This will affect their ability to fight an effective ground war in Ukraine.”
How did the war affect your finances?
We asked our readers to share stories about how the war changed their financial well-being.. We may use your responses in future newsletters.
My savings, mostly stocks, have lost about 15% of their value since the war began, prices have risen by an average of 10%, and some basic foodstuffs such as noodles, rice and cooking oil Goods increased by up to 25%. At this rate, I won’t be able to retire next year at the age of 65. — Max Weinberg, Frankfurt
Massive inflation, very high food prices, shortages of gas, petrol and electricity. Unfortunately, sanctions against Russia have had a dramatic impact on Europe, especially Russia, which, as history and literature suggests, can live indefinitely.I was so happy when Biden won the election, but now I think Trump was the better option for peace.— Sorin Stoicescu, Bucharest, Romania
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As Western financial aid slowly arrives, Ukraine is printing money to pay soldiers and buy weapons, weakening its currency and boosting inflation, The Wall Street Journal says. are reporting.
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No active combat has ever taken place at an operating nuclear power plant. The Times draws attention to the danger of accidents at the Zaporizhia factory.
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