UK intelligence on how Russian economy suffers because of invasion of Ukraine

The Russian war of aggression against Ukraine is having a negative impact on the Russian economy, UK Defence Intelligence says.

Source: UK Defence Intelligence review dated 18 January, as reported by European Pravda

Quote from UK intelligence: "Russia's continued invasion of Ukraine is highly likely to negatively impact the outlook for the Russian economy."

Details: The MoD analysts are convinced there is a risk of overheating the Russian economy as Russia increases defence spending at the expense of other sectors. 

UK Defence Intelligence noted that the Central Bank of Russia had raised its interest rate by 1% to a new base rate of 16%. This marks the fifth increase since July 2023 when the base rate was 6.5%. 

The review says that inflation in Russia continued to accelerate at the end of 2023, rising to 7.5% year-on-year in November from 6.7% in October. 

Meanwhile, overall inflation for 2023, according to estimates from the Russian statistics service, is assessed at 7.4%, almost twice the Central Bank's target.

Background:

• UK intelligence is "almost convinced" that a Russian A-50 long-range radar detection aircraft exploded and crashed into the Azov Sea, which will force the Russian command to limit the area of operation of other military aircraft.
• Earlier, UK intelligence reported that Russia's successes in Avdiivka were limited, and the cost of them is significant.
• Prior to that, UK Defence Intelligence said that statements made in 2023 about the replenishment of the Russian army by another 500,000 people were an exaggeration.

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