Page 6 - Russia OUTLOOK 2024

Military experts say that 2024 could be a good one for Russia’s forces, not least because the Kremlin feels increasingly confident that the fighting is going in its favour and at the same time Ukraine is facing a possible financial crisis as essential Western aid dries up.
Multipolar world is here
And on the political front, the Kremlin made good progress with building up support in the non-aligned world, as was manifested in the G20 and BRICS summits in August. What is appearing is not an us-vs-them world, but a fractured world where most of the global south is not on board with the sanctions and happy to accept discounted Russian raw materials and military tech. And Russian President Vladimir Putin is quite happy with that. It was more or less what he had in mind when he launched his campaign to force his multipolar world on the West.
The West overestimated its ability to make sanctions work and has undermined its authority as a result of trying. The upshot is that the multipolar world is here but works a lot less well than the globalised version prior to the pandemic. Global growth is slowing dramatically as a result and that is likely to persist for many years as the new fragmented supercycle begins.
Ukraine fatigue became palpable in the summer as Kyiv’s much vaunted counter-offensive failed to make a spectacular breakthrough, or indeed any measurable progress whatsoever. By the end of the year commentators began to say that a Russian victory was in sight. We finished 2023 without either the $61bn US finance package or the EU four-year €50bn programme in place. Ukraine is running out of money again and could be forced to capitulate in the summer of 2024 if it runs out of ammo. However, given the amount of political capital Western countries have invested into supporting Ukraine it is likely some sort of fudge will be found. For their part, the Ukrainians are determined to fight to the bitter end.
Overheating
Nevertheless, there are problems. Russia’s growth potential has been reduced from 1-2% pre-war to around 0.3-0.5% now and is doomed to stagnation in the long term. With the economy expected to end 2023 with 2.2% growth or more, it is clearly overheating, which is worrying CBR Governor Elvia Nabiullina but not Putin.
This heat is manifested in strongly rising inflation, which is the main economic problem the country faces. The CBR has been hiking rates aggressively, which will start to bite in 2024. The "Cold Calculation" Telegram channel predicts that GDP growth will decelerate to 0.7% in 2024 as the structural problems such as rising inflation and a very tight labour market start to make themselves felt. The
6 Russia OUTLOOK 2024 www.intellinews.com