Russia’s economy has exhausted its reserves and entered a phase of inevitable decline.
This opinion was expressed in an interview by renowned Russian economist, Doctor of Sciences Igor Lipsits.
The Russian economy, which has long operated under extreme strain, is showing signs of critical overexertion. The resource potential of both the military and civilian sectors is nearly depleted, and further decline seems unavoidable.
“If you drive a car but don’t perform maintenance and major repairs, eventually the car starts to smoke... That is exactly what is happening in Russia,” the expert noted.
According to him, attempts to accelerate military production relying on Soviet-era infrastructure have led to a dangerously critical situation.
“There were military factories built back in Soviet times; they were forced to run three shifts... It seems the limit has been reached. Growth is no longer possible,” the economist states.
He emphasizes that continued growth in the defense industry is impossible without massive investments in building new production facilities, which is unrealistic for Russia under the current geopolitical situation and sanctions.
Moreover, existing enterprises are already beginning to fail due to intensive use of equipment.
“Old factories are starting to break down due to hyperexploitation of equipment... Even the military economy has come to a halt,” Lipsits asserts.
In addition to stagnation in the defense sector, the civilian economy, he observes, has been in free fall since the summer of 2024.
“And the civilian economy has been collapsing since last summer. Even those enterprises that should have been thriving are closing,” the economist said.
This trend indicates systemic problems.
Summarizing the current state, Igor Lipsits concludes:
“The economy has exhausted its reserves and capabilities and is beginning to collapse and contract. From here — only decline.”
The seriousness of the situation is confirmed by the fact that discussions of possible development scenarios (“soft landing” or “hard crash”) are already taking place in pro-government Russian media. This indicates an awareness of the depth of the problems even within the controlled information environment.
Thus, Russia stands on the brink of serious economic shocks, the consequences of which are difficult to predict.
