An economic crisis that has already started in Russia, and a ‘demographic catastrophe’ fueled by the Ukraine conflict, are making Moscow’s war unsustainable, a former Russian deputy energy minister has told TVP World. Vladimir Milov, who is now an opposition activist, said six years of consecutive budget deficits in Russia mean that an economic crisis is “already here.” He pointed to Moscow’s high borrowing costs due to sanctions as a key driver of an economic crunch that cannot be ignored. He said Russia is forced to borrow at 16% interest, leading to 2% of GDP being spent on servicing foreign debt. “Probably over 10% of total federal spending is servicing the interest rate,” Milov told TVP World’s Europe Editor Marcin Zaborowski on the sidelines of the Riga Conference. Milov argued that this budgetary pressure and the resultant stiff tax hikes have combined with GDP growth plummeting from 4% to zero to cause a 10% contraction in investment. “Business is losing confidence by the minute,” Milov said. “So, financing the war... is taking a great toll on the economy, and it's going to end up badly.” Lack of young men Exacerbating President Vladimir Putin’s woes is a “demographic catastrophe,” Milov said, as a high death rate among young men on the frontline and a rush to leave the country to avoid the draft have slashed the birthrate. “Demography is in a much worse state in Russia than even the economy,” he said. “Much worse.” “Russia is fighting with men aged 40 plus,” Milov told TVP World. “The next step is 50 plus... Russia is out of young male population.” Milov argued that Putin cannot continue the war indefinitely and will eventually have to respond to increasingly vocal calls to end the conflict. “The call is mounting,” he said. “It's a dead end, and we don't have a plan and we don't have any strategy. So, at some point we have to stop.”
