Russia faces crisis that "can't be fixed", analyst says

He shared his opinions with Espreso TV.

"Speaking about the state of the Russian economy, Russia has budget issues that probably won’t be solved through war or military spending, but by cutting funding, for example, to the regions, reducing damper payments (a government measure that offsets losses for producers selling goods at low prices - ed.), and raising prices. The Russian economy is moving in a direction where ordinary Russians will end up paying for everything. But the real crisis, where there are simply no tools left to fix it, is in the banking sector," Neskhodovskyi said.

According to him, the Russian banking sector is overloaded with loans issued to the military-industrial complex. These companies will likely start delaying payments to banks. On top of that, many people who took out loans, especially discounted ones for buying apartments in 2022–2023, will lose their jobs and increasingly ask banks to delay payments or file for bankruptcy.

"VTB Bank is now trying to raise almost 2 trillion rubles for extra capitalization to meet the key banking standard — capital adequacy. Other banks in Russia are facing similar issues. That’s why I think the crisis will start in the most typical way — just like it did in the early 1990s in the Soviet Union — from the banking sector. To cover its spending, the Russian government will have to start printing money (mass emission), which has already started, just in small steps. But with current oil prices, they’ll be forced to ramp this up massively within two months. In short, a trillion rubles will be pushed into the economy, and this will hit banks, push up inflation, and worsen the overall economic situation," the analyst explained.

Neskhodovskyi believes the banking crisis in Russia will begin in August or September this year.

• Earlier, Valeriy Pekar, a lecturer at Kyiv-Mohyla Business School and the UCU Business School, also said the Russian economy is in terrible shape, and the second half of 2025 will bring serious challenges that it won’t be ready to handle.