While President Trump continues to revive American manufacturing and secure our borders, Vladimir Putin’s Russia appears to be on the verge of an economic reckoning. A recent report from Dmitry Belousov at the Center for Macroeconomic Analysis and Short-Term Forecasting (CAMAC)—an outfit close to the Kremlin—warns of a looming “stagflation” crisis. Belousov didn’t mince words, describing Russia’s situation as a “countdown to a crisis” marked by stagnation, rising inflation, and increasingly desperate economic conditions. This isn’t just economic jargon—it’s a stark warning of trouble for the man who has tried to project Moscow’s strength on the global stage.
Ever since Putin launched his reckless war against Ukraine, Russia has struggled to maintain economic stability amid intense sanctions imposed by Western nations. Despite managing to dodge a full-blown recession early on, Russia now faces a perfect storm of economic woes: inflation hovering near 10 percent, growth grinding to a halt, and a serious labor shortage hampering productivity. The first quarter of 2025 saw Russia’s GDP growth slow dramatically to just 1.4 percent compared to a year earlier—a troubling sign for Putin’s regime.
Belousov’s report identifies several core problems fueling this downward spiral. Investments in machinery and equipment are drying up, construction projects have slowed dramatically, and consumer spending—especially on non-essential goods—has stagnated since mid-2024. These factors have created conditions ripe for stagflation, where economic stagnation meets runaway inflation, typically coupled with high unemployment. Although official Russian data still reports low unemployment at 2.4 percent, skepticism abounds about the accuracy of Kremlin statistics.
To stem the crisis, Russia’s central bank desperately slashed interest rates from a punishing two-decade high of 21 percent down to 20 percent. This might seem like a drastic move, but in reality, it’s a desperate gamble to stimulate an economy teetering on the edge. Putin’s government knows that inflation is corrosive—it eats away at economic stability and fuels social unrest. As central bank governor Elvira Nabiullina acknowledged, “Inflation ultimately eats away at the economy’s potential, so our goal is to curb inflation and allow the real sector of the economy to develop.”
But Putin’s Russia also faces external pressures, exacerbated by President Trump’s tough stance on global trade. Trump’s strategic tariffs have reshaped international markets, and Russia is feeling the pinch. According to Belousov, increased imports coupled with reduced trade volumes—partly driven by Trump’s tariffs—are expected to further weaken the ruble later this year.
Belousov’s grim forecast includes a “countdown” to crisis, predicting potential economic catastrophe between the second and third quarters of this year. A falling ruble, combined with already declining consumer demand, could trigger even harsher central bank interventions—creating a vicious cycle of rising inflation, higher interest rates, and deeper economic stagnation.
Belousov urges Russian leaders to aggressively tackle inflation and seek new external markets for Russian products immediately. He also recommends stimulating investment in fixed capital—a desperate plea for economic rationality in a regime that has bet heavily on expansionist ambitions and military adventurism. But will Putin’s government heed this advice, or will it continue down a destructive path of confrontation and economic isolation?
From an America First perspective, Putin’s economic troubles underscore the effectiveness of President Trump’s strong stance on Russia. Unlike Biden’s feeble approach, Trump’s tariffs and sanctions have put real pressure on Russia economically, limiting its ability to finance aggression abroad. Trump’s policies remind Putin—and any other adversarial regimes—that America will no longer tolerate economic exploitation or military aggression.
As Russia faces its economic countdown, America should remain vigilant and resolute. Putin’s economic woes could make him increasingly unpredictable—a wounded bear backed into a corner. President Trump has proven he understands the stakes, and under his leadership, America must continue to leverage economic strength to maintain global stability and deter aggression. The message to Putin is clear: choose economic reform and peace, or continue down this destructive path at your peril.
