A Weakened Ruble Creates Economic Pressures

The Russian economy faces significant challenges due to a weakened ruble, which has crossed 100 rubles per dollar multiple times in 2023. This situation highlights Russia's heavy reliance on imported goods, necessitating adjustments in supply chains and logistics, particularly through increased imports from China and Central Asian countries. The weakened ruble acts as a secondary tax on the economy, exacerbating inflation and dependency on imports, particularly for the defense industry. While the economy currently manages production and labor shortages, concerns arise about potential long-term crises. Shifts in focus toward specific sectors could pose risks and create political difficulties for the regime if reversing these trends becomes necessary.