Russia’s Economy Has Reached a Point Nothing Can Save It

(MOSCOW) – Russia’s economy continues to be presented as resilient but beneath the surface the cracks are becoming harder to conceal. In a recent conversation on the podcast The Global Gambit, analyst Konstantin Samoilov provided a detailed assessment of the situation in 2026, highlighting worsening regional budget crises, rising inflation, declining public services, labour shortages, hidden deficits and growing pressure on the wartime system maintained by the Russian dictator Vladimir Putin.

While official data still suggests stability, Samoilov and other analysts argue that the economic model now relies heavily on secrecy, state spending and shrinking reserves. Life outside Moscow tells a different story, with regional governments under severe strain and the Kremlin facing the challenge of financing both the war in Ukraine and basic domestic stability.

Samoilov noted that economic pressure could influence the Russian dictator’s political behaviour, with added strain now visible even in industrial production. As Europe steps up support for Ukraine, these internal economic difficulties may prove as significant as battlefield developments.

Looking ahead to Russian Victory Day in early May and recent European political shifts, Samoilov described the situation as one of chaos affecting every part of Russian life. He observed that prominent Russian propagandists, unthinkable only a year earlier, have begun turning against the Russian dictator. “I believe that there will be the major change in Russia,” he said. “I believe that Putin is going to be out of the office, out of the job sometimes by September. Major changes. Russia is pregnant with changes.”

The host recalled the broader context, including developments in the Middle East and Europe, and asked for an update on the past month. Samoilov replied that everything previously forecast was happening and intensifying. “Nothing unpredictable,” he said. Russian propaganda had stopped sugar-coating the situation because the facts could no longer be hidden. Federal employees in some areas were not receiving salaries, and while still a minority, the trend had begun.

On the ground, communal services had deteriorated. Trash collection now occurred only once or twice a week in many places, leading to piles of waste. Snow remained uncleared in parts of the country and roads, even where snow had melted, were in poor condition and unrepaired. March and April, traditionally months for post-winter maintenance, had seen no such work this year. Residents in many cities were selling personal belongings on the streets to buy food.

Local budgets in the regions had deteriorated sharply. In 2025 some 68 regions faced budget crises; the figure had now risen to 78, with at least two reported as insolvent. Federal transfers to the regions had fallen by 30 to 40 percent over the past four or five years. Teachers and kindergarten staff were being laid off because provincial authorities could no longer afford their wages and were borrowing from commercial banks at high rates simply to maintain basic operations. Bus services ran less frequently, creating large crowds at stops. Samoilov compared the scenes to those he remembered from the late Soviet Union in the 1980s.

Samoilov confirmed that Russian state statistics agency Rosstat had classified large parts of its data since 2023 or 2024, making it a criminal offence to release certain figures. He described this as evidence of an extraordinary situation requiring extraordinary measures by the state. Official inflation figures were widely believed to understate the true level by a factor of three, a view supported by assessments from Swedish and German intelligence. A substantial budget deficit had also been identified.

The wartime footing had previously shielded the defence industry, but Samoilov said the broader problems had now reached even that sector. Iconic military-industrial enterprises such as Uralvagonzavod, which produces Russian tanks, had begun laying off staff. The trickle-down effect from systemic issues was now affecting construction and industrial production.

To illustrate the position, Samoilov offered a household analogy. A family earning the equivalent of 100,000 pounds a year and spending 80,000 pounds would normally build reserves. If income were suddenly halved while spending continued or increased, the family would draw down savings until the account reached zero. Russia, he said, had followed exactly that path after years of high oil revenues. Those reserves were now exhausted. “The bill is due and the balance is zero,” he stated.

The Russian dictator, according to Samoilov, had run out of options and would soon begin a blame game, targeting senior economic officials such as the head of the central bank. Meanwhile the Russian dictator’s strategic goal remained survival above all else. He would not end the war in Ukraine, as that would mean immediate loss of power. The army was losing ground and the system depended on prolonging the conflict. Recent moves to restrict internet access were seen as an attempt to prevent organised dissent, drawing on the example of unrest in Iran months earlier.

Samoilov forecast increasing chaos in the coming weeks, including uncertainty over whether the Victory Day parade could be held safely. He predicted major changes in Russia, with the country “pregnant with changes” and shaking before an eventual eruption.