"Those days are over," the report said. "As the war continues into its second year and Western sanctions bite harder, Russia’s government revenue is being squeezed, and its economy has shifted to a lower-growth trajectory, likely for the long term."
The Journal cited Alexandra Prokopenko, a former Russian Central Bank official who abandoned his country after the invasion.
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"Russia’s economy is entering a long-term regression," he warned.
While global inflation after the pandemic has been a serious problem, the high costs of products generally traded with Russia has sent food and fuel in Europe to soaring prices. Rolling blackouts were utilized throughout 2022 in the U.K., but regulators warn that Germany could run out of gas next winter, the Financial Times reported last week.
Still, NATO has held strong, and Russia's biggest exports, oil and gas, lost large customers.
"Putin considered Germany too dependent on Russian energy, too weak militarily, and too business-minded to mount any significant resistance to his war. He was wrong," wrote Council on Foreign Relations expert Liana Fix and Caroline Kapp.
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The ruble is down over 20 percent against the dollar in the past five months. The military draft has resulted in over 22,000 Russians fleeing to the United States, revealed the latest US Customs and Border Protection data. The draft also means that young people are being pulled from the labor force and sent to war, which is starting to impact businesses.
"There is no sign the economic difficulties are bad enough to pose a short-term threat to Russia’s ability to wage war. But state revenue shortfalls suggest an intensifying dilemma over how to reconcile ballooning military expenditures with the subsidies and social spending that have helped President Vladimir Putin shield civilians from hardship," the Journal explains.
Properties are being seized from Russian oligarchs and quickly driving yachts to islands that refuse to implement sanctions.
“There will be no money next year, we need foreign investors,” said Russian raw-materials billionaire Oleg Deripaska this month.
The meeting between Putin and China's Xi Jinping is further evidence that Russia is increasingly dependent on China. Now that Putin has stashed nuclear weapons on the border of a NATO country, China might face more pressure from the global community about aligning itself with a country ready to start a nuclear war.
Read the rest of the economic analysis in the Wall Street Journal.