• A big fall in the number of public appearances by the Russian leader in 2026, and why this might lead to political problems;

• A push to force universities to recruit 2 percent of their students for the military— particularly the country’s newly-created drone forces.

We also highlight data showing the Russian economy continues to stagnate, and how payouts to student mothers are supposed to help solve Russia’s demographic problem.

This newsletter contains 1667 words and will take about 8 minutes to read. It was translated and edited by Howard Amos.

Putin’s public appearances drop 24% in last 3 months

The Russian leader’s preference for geopolitics and closed-door meetings could end up increasing the political risks facing the regime.

The number of times Russian President Vladimir Putin has appeared in public was significantly down in the first three months of this year, according to a tally by Faridaily. The noticeable absence is likely to not only be the result of Putin’s obsession with geopolitics—particularly the war in Ukraine—but also a desire to avoid association with unpopular domestic issues, and a growing preference for secrecy.

In the first three months of this year, Putin has taken part in just 54 public meetings and events—compared to 71 in the same period last year. In 2024, he attended 107 public events, but this number was so high partly because of campaigning in the run-up to presidential elections in March. Before the full-scale war in Ukraine and the coronavirus epidemic, Putin also tended to participate in more public events (for example, in 2019, he was seen 87 times in the first three months of the year).

We reached these numbers by counting the press releases and transcripts on the Kremlin website. We did not include pre-recorded bilateral meetings—so-called “canned” events—that are often released weeks, or even months, after they take place (this helps create the illusion that Putin, 73, is always hard at work). Even if you do include the “canned” events, though, Putin has still attended 20 percent fewer public events this year.

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• Why are Russian officials so careful when talking about the conflict?

• Will Putin follow through on new threats against Europe?

• Can higher oil prices solve Russia’s economic problems?

We also look at unprecedented internet blackouts in Moscow, the arrest of (yet another) ex-deputy defense minister, an unusual mistake by the Kremlin’s press service, and whether the Russian capital is really experiencing financial difficulties.

⏳ This newsletter contains 1866 words and will take about 9 minutes to read. It was translated and edited by Howard Amos.

Kremlin wary not to alienate Trump with Iran war criticism

Russian President Vladimir Putin and other senior Russian officials have been extremely cautious when talking publicly about the conflict in the Middle East. Indeed, the Kremlin’s communications strategy could be summarized as: “repeat that Russia is a strategic partner of Iran, and avoid criticism of the U.S. leadership.”

Since the start of the U.S.-Israeli operation, Russia has only once explicitly criticized Washington. That was in a condolence message Putin sent to Iran after the killing of the country’s head of state, Ali Khamenei, in which he described the assassination as a “cynical violation of all norms of human morality and international law.” We don’t know whether Putin was similarly critical during a phone call with Trump on Monday, but it seems very unlikely. The Kremlin’s official statement following the call was conciliatory.

Although Iran is a Russian ally, and has provided the Russian military with drones for the war in Ukraine, two senior Russian officials told Faridaily that Putin does not want to risk angering Trump. In other words, Putin will put his personal relationship with the U.S. leader before any rhetorical assistance for Iran.

After all, Putin is a pragmatist. He understands that Trump’s presidency is an opportunity for Russia to win the war with Ukraine, said one of the sources, who is close to the Kremlin. “A war with Ukrainians to the bitter end would be an extremely negative, even catastrophic, outcome for Russia,” he added. Putin will continue engaging with Trump over Ukraine despite the war in the Middle East, added the second source.

At the same time, the public caution of Russian officials does not mean the Kremlin has frozen out Iran entirely. After all, Russia and Iran signed a strategic partnership agreement in 2025 that specified intelligence sharing and military consultation.

U.S. media outlets have reported over the last week that Moscow is providing Tehran with information (particularly satellite imagery) about the movements of U.S. troops, ships and aircraft in the Middle East. The Kremlin has declined to comment on the reports, and Trump has said he has no confirmation that this is the case.

Either way, it’s likely that, while the Trump-Putin relationship is the Kremlin’s priority, Russian officials also see the Iran war as presenting some opportunities. The two sources both highlighted a belief that the war in Iran was a step toward the sort of new world order Putin has been seeking.

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New threats to Europe

While wary of criticizing the U.S. and Israel, Putin has been far less restrained when it comes to Europe. In particular, he instructed the Russian government last week to assess the feasibility of an “early termination” of natural gas supplies to European countries (except Hungary and Slovakia). The word “early” here is a reference to the European Union’s full ban on Russian LNG and gas imports due to be implemented in 2027.

Deputy Prime Minister Alexander Novak later said that Russia was looking at re-directing supplies to China, India, Thailand, and the Philippines. If Russia did halt gas supplies, it would be a major blow to European energy markets. According to Eurostat, Russia provides about 16 percent of Europe’s LNG imports and 13 percent of the EU’s total gas supplies.

However, according to Faridaily’s sources, Putin’s threats should not be taken seriously. Above all, an end to gas supplies to Europe would inflict a major financial blow on Russia. One source said that Putin’s comments were just an attempt to push gas prices higher—adding to the pressure on European capitals amid the Iran war.

Higher oil prices will not solve Russia’s economic problems

The rise in oil prices triggered by the fighting in Iran will inevitably mean a financial windfall for the Kremlin. How much money Russia makes, though, will depend on how long the fighting continues, and whether oil prices remain elevated.

The nature of Russia’s tax system means we won’t have the data to calculate the Iran war windfall in March for a number of weeks. Instead, we can only make an educated guess.

Read more

• Why the Kremlin has decided to shut down Moscow’s Gulag History Museum and replace it with one pushing a propaganda narrative about World War II;

• The problems faced by Ukraine war veterans and what the Kremlin is doing to try help them re-integrate into society.

We also highlight data suggesting further labor market weakening, the nationalization of a major ball-bearing factory, and increasing pressure against Telegram founder Pavel Durov.

⏳ This newsletter contains 2217 words—it will take about 11 minutes to read.

Translated and edited by Howard Amos.

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Gulag museum closure a watershed moment

The shuttering of the widely-praised, state-owned Gulag History Museum highlights the ever-growing influence of Russia’s security services.

Moscow City Hall announced last week that the capital’s Gulag History Museum will be shut down after nearly 20 years of commemorating the darkest page of Soviet history. In its place, a museum will be opened about Nazi crimes during World War II, and the so-called “genocide of the Soviet people.” In keeping with the times, it will be headed by a veteran of the war in Ukraine.

The Gulag History Museum was the only major state-run institution commemorating Stalinist repression, and its replacement by a museum promoting a propagandistic interpretation of World War II is a pivotal moment in Russia’s cultural and political life that vividly illustrates the dominance of the security services, and their ultraconservative political allies. Yan Rachinsky, chairman of veteran human rights and history organization Memorial, said the closure was like “spitting on the graves of the victims of state terror,” and a shameless bid to “destroy memory that is inconvenient for the current government.”

The first indication of problems for the Gulag History Museum came in late 2024 when its work was suspended under the pretext of “fire safety violations.” According to our sources (and reporting by The Moscow Times), this was ordered by the Kremlin, and the Federal Security Service (FSB). The trigger was apparently a “Prayer of Memory” at which participants read aloud the names of victims of repression. A similar event, “Returning the Names,” was previously organized by Memorial prior to the organization’s ban in 2021.

Neither Moscow Mayor Sergei Sobyanin, nor City Hall (which formally owns the museum) have commented in detail on last week’s announcement. They simply published a press release describing the new Museum of Memory.

The source also said Kremlin aide Vladimir Medinsky, a former culture minister and participant in Ukraine ceasefire negotiations, played a key role in the decision. Medinsky heads the Russian Military Historical Society (RMHS), an influential historical propaganda group that has helped establish several museums about the “genocide of the Soviet people” in World War II.

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The Gulag History Museum was set-up by City Hall in 2001, and the first head of the museum was dissident Anton Antonov-Ovseenko, who spent a total of 13 years in Soviet camps and prisons. Under Sobyanin (whose grandfather was repressed in 1937), the museum was moved from its original home in a converted apartment near the Kremlin into a newly-renovated four-storey building. Under its second director, Roman Romanov, it became a rare example of a internationally-renowned Russian state-owned museum, with some journalists comparing it to Berlin’s famous Jewish Museum. In 2021, it was awarded the Council of Europe Museum Prize for institutions making a significant contribution to the “understanding of European cultural heritage,” and “the promotion of respect for human rights and democracy.”

The museum that will open on the vacated site will be much more in line with the Kremlin’s view of the past. In recent years, Russia has heavily promoted the idea of a “genocide of the Soviet people,” an entirely new concept. Historian Konstantin Pakhaliuk, who was dismissed from the RMHS in 2023, has said that the idea helps counter-balance the belief that the Soviet Union helped to start World War II. “It allows them to say: ‘We are the main victors in this war, and we are also the main victims’,” Pakhaliuk said.

Russian President Vladimir Putin first mentioned this “genocide” in July 2020. In October 2022, a Russian court designated the siege of Leningrad as genocide, and, last year, Russia passed a law “On Perpetuating the Memory of the Victims of the Genocide of the Soviet People.” Now, the State Duma looks set to approve legislation that would make publicly denying the “genocide of the Soviet people” a crime punishable by up to five years in prison.

Since he came to power, Putin’s views of Stalin, who presided over the murder and imprisonment of millions of Russians, have evolved. In the early 2000s, Russian officials generally avoided open praise of the brutal leader, and even occasionally leveled criticism. Putin met repeatedly with Alexander Solzhenitsyn, who wrote The Gulag Archipelago, before the author’s death in 2008. And, as recently as 2017, Putin attended the unveiling of the “Wall of Sorrow,” a memorial to victims of political repression in downtown Moscow.

However, much has changed since the full-scale invasion of Ukraine. Most of the estimated 131 monuments to Stalin erected in Russia under Putin have appeared amidst the fighting, and the first such Stalin statue in Moscow was put up in the metro last year. The Kremlin’s position on the Gulag History Museum was expressed on Wednesday by Putin adviser Valery Fadeev, who heads the Presidential Commission on Commemorating Victims of Political Repression (which last met in 2019). “Some [security officials] are beginning to think the topic of repression is being used by Russia’s enemies,” Fadeev told Kommersant newspaper.

Despite appearances, the Kremlin has not yet completely renounced the idea of honoring the memory of Soviet-era victims of political terror. But, as present-day repression intensifies, the topic is increasingly awkward. It’s far easier to focus on erasing “negative” memories, and promote a creeping rehabilitation of Stalin.

Analysis in brief

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• The Kremlin’s decision to allow people to meet with Putin without spending several days in quarantine (a Faridaily exclusive!);

• Is a banking crisis really already underway in Russia?

We also briefly examine the attempted assassination of the deputy head of Russian military intelligence, a 50 percent fall in Russian oil-and-gas revenues in January, and how Moscow is stepping up pressure on WhatsApp, Telegram, and YouTube.

⏳ This newsletter contains 1944 words—it will take about 10 minutes to read.

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Kremlin (finally) scraps quarantine for Putin meetings

In wartime Russia, face-to-face meetings with the president are an extremely important political commodity—and they’re now easier to obtain.

Russian President Vladimir Putin has stopped demanding that all those he meets are quarantined in advance, four sources with knowledge of Kremlin protocol told Faridaily. Quarantine measures for the Russian leader were introduced in 2020 amid the coronavirus epidemic, and they have been strictly enforced by the Federal Guard Service (FSO).

Known to be careful with his health, Putin, 73, was the only head of state to impose such a strict coronavirus quarantine—and maintain it for so long. Government ministers, heads of state-owned companies, and billionaires have all had to put their lives on hold and stay in specially designated isolation facilities if they wanted to meet the Russian leader.

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• What we know about the Council of Europe’s attempt to establish an official organ to represent the exiled, anti-Putin Russian opposition.

• Why Russia’s domestic aviation manufacturing industry has failed to produce a single plane in 2025.

We also look briefly at the repeated destruction of a memorial to murdered journalist Anna Politkovskaya, some angry reactions to a jump in inflation, and the sale of one of Russia’s biggest airports to a longtime friend of Putin.

⏳ This newsletter contains 2123 words—it will take about 10 minutes to read.

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The exiled Russian opposition’s first ‘official’ institution

The establishment of a Council of Europe platform for Russia’s democratic, anti-Putin opposition has raised questions about transparency, and legitimacy.

European officials have often complained privately in recent years about the fragmentation, infighting, and competing agendas of Russia’s exiled opposition. In a bid to address this problem, the Council of Europe announced Monday it had chosen 15 delegates for its “Platform for Dialogue with Russian Democratic Forces” that it hopes will “strengthen Russian democratic forces to carry out democratic change in Russia and achieve a lasting and just peace in Ukraine.”

How were delegates chosen? Exiled Russian opposition groups could not agree on holding a vote for members to the Parliamentary Assembly of the Council of Europe (PACE) platform, and were unable to come up with an agreed list of representatives—effectively shifting the political responsibility for the composition of the platform onto PACE.

The resulting selection procedure was controversial, and opaque. The resolution establishing the platform, which was passed by PACE in October, contained no details about the process. Nor were any released subsequently. Apparently, PACE simply collected applications sent to a Proton email inbox. A total of 209 applications were received, one Russian opposition figure told Faridaily (he himself was not included in the delegation). He claimed: “There was no filtering on the Russian side.”

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While there is little to indicate Witkoff will be able to strike a deal this time, growing economic headwinds for Moscow seem to make peace more likely in the long term. The Finance Ministry released preliminary budget data Monday laying bare Russia’s financial problems as the war approaches its fifth year.

🛢 Oil-and-gas revenues far lower than expected

Revenue from producing and selling oil and gas was 22 percent below what was predicted last year in the planning of the budget, and 24 percent lower than the year before (2024).

There are two reasons for this. Firstly, oil prices were lower than expected. Not only did prices fall, but Western sanctions meant Russia was obliged to sell crude even cheaper (mostly to India and China). As a result, the price of Russian oil fell below $40 a barrel in the second half of the year, even though Russia’s spending plans in last year’s budget had assumed it would be worth $60 a barrel.

Secondly, a stronger ruble. Russia’s currency was among the strongest in the world last year. The ruble was supported by a significant trade surplus, low capital outflow due to sanctions, and high interest rates. We previously looked in detail at the reasons for the ruble’s strength here.

⚙️ Non-oil-and-gas revenue also down (albeit not as much)

Non-oil-and-gas revenue was slightly down, but this was less concerning for the Kremlin. As the government has repeatedly raised taxes in recent years, non-oil-and-gas revenue has been growing, and 2025 was no exception: up 12.6 percent year-on-year. At the same time, the total amount collected was still below the official target.

🔁 Revenue mix shifts to a record low for oil-and-gas

The split last year was 23 percent oil-and-gas revenue, and 77 percent non-oil-and-gas. There is Finance Ministry data on the split going back to 2006, and this is the lowest the oil-and-gas share has ever been. Over the last two years it has hovered about 30 percent, and before 2014 it went as high as 50 percent.

📈 High spending resulted in a large deficit

With revenue below expectations, and expenditure a bit higher, Russia recorded a substantial deficit of 5.6 trillion rubles (2.6 percent of GDP) last year. It was covered mainly through an increase in government debt. Even so, sovereign debt remains extremely low (at around 17% GDP).

What conclusions can we draw?

• Russia has become less dependent on oil-and-gas revenue, but the Kremlin is unlikely to be happy that this is occurring in wartime. Falling oil-and-gas revenue combined with economic stagnation means the option to dramatically increase state spending—like in the early years of the war—is off the table.

  According to calculations by the respected Tverdie Tsifry Telegram channel, if oil prices, and the value of the ruble, remain at current levels, the deficit this year will be 3.5 trillion rubles ($45 billion). That is a huge amount—almost half the Kremlin’s annual spending on pensions and social benefits.

• Through financial tweaks (like raising some taxes and increasing borrowing) and using reserves in the National Wealth Fund, Russia can maintain its current high level of military spending for several more years. However, this would mean there is not enough money for infrastructure development, and human capital.

  The Finance Ministry believes the era of ultra-high oil-and-gas revenue is now at an end. The government last month published their budget forecasts through 2042. According to these figures, the share of oil-and-gas revenue in the budget will gradually fall to 13 percent.

• Russia’s finances are not in great shape, and Putin cannot ignore economic reality as he engages in peace negotiations. It’s obvious that the war is draining resources not only from Ukraine, but also from Russia.

• Further tax increases are inevitable. Even if the fighting in Ukraine comes to an end, Russia will need money for recovery and development. The only question is how big the tax rises will be.

• What Putin’s refusal to comment on events in Venezuela and Iran says about his strategy in Ukraine;

• A survey showing that Russian business sentiment has deteriorated sharply, with weak demand and dissatisfaction over high taxes at record levels.

We also briefly consider the Russian Orthodox Church’s first anti-abortion prayer and why Russian officials prefer not to acknowledge that the war in Ukraine has now lasted longer than the so-called Great Patriotic War (1941-1945).

⏳ This newsletter contains 1738 words—it will take about 9 minutes to read.

Kremlin ready to make geopolitical sacrifices to ‘win’ in Ukraine

Desperate to keep Trump on side to secure a favorable peace deal in Ukraine, Putin is even willing to refrain from criticism of U.S. actions in Venezuela and Iran.

Russian President Vladimir Putin has barely appeared in public since the New Year, and has notably refrained from commenting on two major global events: the capture of Venezuelan President Nicolás Maduro by the U.S. military on January 3, and Washington’s threats to launch military action in support of Iranian protestors.

Having ordered the full-scale invasion of Ukraine in response to what he deemed a “U.S.-orchestrated coup” in 2014, Putin now appears remarkably relaxed about Western-led regime change. This is particularly significant because his coyness risks jeopardizing Russia’s relationships with countries in the Global South, where opposition to U.S. military interventions runs deep.

Putin is likely avoiding criticism of his U.S. counterpart Donald Trump because he still hopes Trump will help him conclude a peace deal in Ukraine that is favorable to Russia.

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• The first parliamentary elections since the start of the war

• A possible squeeze on non–oil-and-gas revenue

• The social and political impact of soldiers returning from Ukraine

• The specter of declining living standards

• The risks of implementing Russia’s “great internet firewall”

While the war in Ukraine continues, the Kremlin will carry on pretending life in Russia is “normal”—while simultaneously cracking down on dissent, tightening censorship, and squeezing every last drop out of the economy to achieve victory on the battlefield.

However, the war has become so all-consuming that a peace deal would also be a political challenge. In post-war Russia, there will be a reckoning with the enormous costs of the fighting (human and economic), as well as a search for new political messaging, and existential questions about how to generate economic growth.

The five key issues we predict will define Russia in 2026 could all be affected by an end to the fighting—but it will not diminish their importance.

⏳ This newsletter contains 1450 words—it will take about 8 minutes to read.

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📌 First parliamentary elections since the start of the war

Why does it matter? Over the last two decades, Russian President Vladimir Putin has done everything in his power to turn elections into a ritualized, purely technical procedure—from the widespread use of ballot-stuffing and fraud, to total control of the media. But the Kremlin needs to preserve a constitutional majority for the ruling United Russia party in order to be able to pass the laws it needs, and elections remain an important part of how the regime sees itself. In the run-up to the vote, the Kremlin will want to avoid angering the elite and the wider public. As a consequence, election periods tend to be a nervous time.

Wartime or peacetime? The most important consideration for the Kremlin is whether the elections—scheduled for September 2026—will be held while the fighting continues in Ukraine. In many ways, it would be more straightforward to hold wartime elections because the Kremlin already has the experience of the 2024 presidential elections.

Indeed, if a peace deal were reached in the coming months, it would make voting more unpredictable. The Kremlin’s political managers would have to take account of how exactly the war ended; how supporters of the war reacted to the arrival of peace; the impact of the return of hundreds of thousands of men from the front; and the economic situation. It’s possible the Kremlin’s concerns about their ability to “control” elections explains the online restrictions imposed this year, and repression targeting activists that pose no political threat.

📌 Squeeze on non–oil-and-gas revenue

Why does it matter? The idea that the Kremlin is solely dependent on money from oil and gas exports is a myth. As much as 78 percent of Russia’s budget actually consists of taxes, duties, and other revenue streams formally unrelated to oil and gas extraction (and this percentage has been rising). If non–oil-and-gas revenues were lower than projected next year because of anemic economic growth, it could influence policymaking—perhaps even pushing Putin toward ending the war in Ukraine.

Although Russian military spending remains at a record high, a lack of money could have serious consequences. Defense Minister Andrei Belousov recently complained his agency was operating amid “acute financial restrictions dictated by the federal budget.”

What are the risks? When drafting this year’s budget, the authorities projected 31.4 trillion rubles ($340 billion) in non–oil-and-gas revenues—almost 10 percent more than last year. This was a bold move given that the economy is expected to struggle. Even according to the official GDP forecast, growth will not exceed 1.3 percent, and estimates by most independent economists are under 1 percent. The government is hoping growth in non–oil-and-gas revenues will be delivered by additional VAT income (VAT was raised from 20 percent to 22 percent on January 1). However, it’s an open question whether this will generate enough money. Apart from anything else, the increased tax burden, and high interest rates, could push thousands of businesses into the shadow economy.

📌 Soldiers returning from Ukraine

Why does it matter? About 700,000 soldiers are currently fighting in Ukraine, according to official data. Whether they return all at once after a peace deal, or gradually, the consequences will be significant. Since the full-scale invasion in 2022, there have been at least 1,000 cases in which Russian soldiers have killed, or attempted to kill, Russian civilians far behind the frontlines.

What to expect? State-owned media do not devote any airtime to the crimes committed by veterans. Instead, Russian propaganda—and Russian officials—refer to them as “heroes,” and glorify their exploits. Putin calls them a “new elite.” In private conversations, however, officials have previously conceded to Faridaily that these are badly traumatised men, who are accustomed to violence, and prone to PTSD and alcohol abuse.

The first to suffer from the violence committed by ex-soldiers will almost certainly be their families, especially their wives. But there will also be conflicts with civilians—particularly those who did not fight.

Soldiers who enjoyed the enormous salaries and bonuses given to those who volunteered to fight may also be unwilling to settle for low-paid jobs when they return to civilian life. According to officials, 250,000 already-returned soldiers are unemployed. And a source in a government-affiliated analytical center said ex-soldiers might quickly end up in debt—making their existence even more precarious.

📌 Declining living standards

Why does it matter? Russia’s wartime consumer boom has come to an end. For the first two years of fighting, this helped the Kremlin maintain the illusion that the war was far away, and was having little effect on everyday life. But the illusion began to fade last year, and this process will continue to unfold in 2026.

What is happening to consumer demand? The boom of 2023–2024 was driven by rising household incomes, fueled by expanding social handouts (not only to the military and their families, but also, for example, to families with children), and, most importantly, by strong wage growth. However, wage growth slowed significantly in 2025. From January through October, Russian wages grew 4.7 percent year-on-year in real terms (compared to 9 percent in 2024).

Ongoing labor shortages mean modest wage growth will likely still be the norm in 2026. At the same time, high borrowing costs and weakening consumer confidence are already weighing heavily on consumer demand. Retail trade growth fell from 7.2 percent in 2024 to just 2.5 percent in 2025.

A gradual fall in living standards is extremely unlikely to have any dramatic political consequences. However, it could fuel unhappiness over the long-term. With an economy heading for stagnation, it will become harder and harder for the Kremlin to find the resources to manage this discontent.

📌 Implementing Russia’s ‘great internet firewall’

Why does it matter? The Kremlin carried out an unprecedented assault on internet freedoms last year and—if things continue—Russians may soon find themselves completely cut off from independent information, and communication with the outside world.

What happened in 2025? Russia effectively blocked WhatsApp, the country’s most popular messaging app; video sharing platform YouTube; and voice calls on Telegram, Russia’s second most popular messenger. At the same time, it pushed “national messenger” MAX as a replacement, including via laws mandating its use. In addition, many regions have had no mobile internet for six months—internet shutdowns in Russia last year broke all global records. In December, Putin claimed that Russia had “achieved full digital sovereignty.”

What will happen in 2026? There are no signs the online crackdown has come to an end—and some of the Kremlin’s plans for this year are already clear. Parliament is set to approve laws requiring Russians to register the International Mobile Equipment Identifiers (IMEIs) of their devices in a special database, allowing telecom operators to block “suspicious” devices. It will also be made illegal to receive calls from foreign numbers.

However, there is far from universal support for these restrictions. Even state-controlled pollster VTsIOM has said 39% of Russians do not support blocking foreign internet services. And this rises to 68% of those aged between 25 and 33. This has led to some small protests (for example, one in the Siberian city of Tomsk in December last year, shown above), and it’s possible that the discontent may play a role in the September parliamentary elections.

We hope you’re enjoying the festive season! While things are still relatively calm and quiet, we’ve selected our top three most-read Russia stories from 2025 – and made them free to read.

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Putin’s obsession with Russia’s fertility rate, as well as the growing influence of Orthodox and conservative values in the Kremlin, is likely to lead to anti-abortion legislation.

In 2025, Russia saw an extraordinary event—the suicide of a government minister. We spoke to our high-level sources to gauge their response.

Russia’s unprecedented internet crackdown goes far beyond censorship, threatening access to basic online services and driving a dramatic—and likely permanent—process of de-digitalization.

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• Why Putin dresses more and more often in military uniform, and why he has taken to being seen at more military-themed meetings;

• The reasons for the ruble’s strength this year. Can it last?

We also briefly look at new data on Russian military spending, a rare street protest against the Orthodox Church, and the first foreign company to be designated “extremist.”

This newsletter contains 2114 words—it will take about 10 minutes to read.

Putin’s increasingly frequent military PR-stunts

The “militarization” of Putin’s media activity is supposed to bolster his image as a wartime leader and convince the White House that Russia is winning on the battlefield.

There has been a significant uptick in the number of public meetings about the Ukraine war involving President Vladimir Putin over the last three months, according to a tally by Faridaily. The Russian leader has also been seen far more often in military uniform.

Putin held two such meetings about the war in October (1, 2), one in November (3), and two so far this month (4, 5)—a total of five. In comparison, he had just four such meetings in the entire first two years of the war (2022 and 2023). Similarly, in the same October-December period, Putin appeared in public wearing a military uniform three times. Until the beginning of this year, he had only ever been seen in civilian clothes.

Being shown as more directly involved in the military effort is a tactic supposed to bolster Putin’s image as a successful commander-in-chief, and broadcast confidence that Russia is winning the war. And this is designed to strengthen the Kremlin’s negotiating position in ongoing peace talks. Above all, Putin seems to want to influence the thinking of U.S. President Donald Trump and his administration, which has stepped up its efforts to find a peace agreement acceptable to all sides of the conflict. The Kremlin wants to try and convince Washington that Ukraine’s capitulation on the battlefield is inevitable—so, Moscow should be allowed to dictate its terms for ending the war.

Unlike his Ukrainian counterpart, Volodymyr Zelensky, whose sartorial choices changed after the full-scale invasion and is regularly seen in military attire, Putin has generally preferred to remain in a suit. The first time Putin donned a military uniform was in March, 2025, at a meeting when his generals informed him Russian forces were about to retake parts of Kursk region seized by Ukraine. This was also shortly after Trump’s return to the White House, and before one of the first visits to Moscow by U.S. special envoy Steve Witkoff.

At least circumstantially, there is evidence that Putin’s military outfits coincide with key moments in peace negotiations with Washington. He again put on a military uniform in November when details of Trump’s new peace plan were revealed. And in December a day before the Moscow visit by Witkoff and with Trump’s son-in-law, Jared Kushner.

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• Top Russian officials told Faridaily that the Kremlin does not expect to regain control of $280 billion in frozen assets;

• How revenue shortfalls have replaced spiralling defense spending as the main headache for Russian financial planners.

We also look at why Putin has canceled his annual state-of-the-nation address, the FSB getting new powers to oversee academics, and how Russia is poised to block messaging service Whatsapp.

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Wrangling over frozen Russian assets

The Kremlin would be open to the idea of the funds being invested in rebuilding Ukraine after the end of the fighting.

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The last six months have seen a series of restrictions on internet use. While each restriction on its own may not seem like much, together they amount to a significant, new intrusion into the daily life of Russians. This is not only a question of censorship. It’s about access to basic online services, and a dramatic—likely permanent—process of de-digitalization.

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Creeping restrictions hand power to FSB

In recent weeks, it has become clear that the Kremlin is moving from selective shutdowns and targeted internet interference to the implementation of what has been dubbed “Putin’s firewall”—that is, a campaign to isolate the Russian internet from the world.

Symbolically, the government last week formally enshrined the obligation of mobile operators to shut down the internet at the request of the Federal Security Services (FSB) in a bill submitted to the State Duma. The all-powerful domestic security agency already has more than enough power to enforce its will, but the legislation will legalize existing practice—and mark the formalization of the FSB’s control of Russia’s online world.

Internet blackouts part of day-to-day reality

We can date the beginning of this year’s internet crackdown to May 8—the day before Russia marked Victory Day, a public holiday celebrating the anniversary of the Soviet Union’s defeat of Nazi Germany. Just before the start of the festivities, people all over the country started reporting mobile and fixed-line internet outages. On Victory Day itself, the shutdowns hit Moscow, where the internet was out for most of the day. Muscovites are accustomed to online taxi and food delivery services, as well as contactless payments via smartphones. These were all unavailable without the internet.

Online shutdowns are a well-known tool of authoritarian regimes. However, until now, they were rare in Russia. Before the full-scale invasion of Ukraine, there were only a couple of such cases: one in the North Caucasus region of Ingushetia in 2018 when internet access was cut during protests against a border agreement; the other in parts of Moscow in 2019 during opposition demonstrations. After the start of the war, shutdowns gradually became more common—particularly in regions bordering Ukraine.

It appears that the Kremlin was happy with its May “experiment,” and internet shutdowns have since become part of everyday life. In May, there were 69 instances of outages across Russia, rising to 662 in June, and over 2,000 in both July and August, according to data collated by the NA SVYAZI internet research project. In October, there were 1,800 outages. Residents of a country that once prided itself on its digitalization now need to withdraw cash in advance, download maps onto their smartphones, and order taxis by ringing up taxi firms.

The official explanation is that outages are needed to protect against Ukrainian drone attacks. While there is likely some truth to this claim (drones can use mobile towers for navigation), it’s also evident that the Kremlin is exploiting security concerns to extend its control over the internet. Tellingly, internet outages have occurred in regions thousands of miles from Ukraine (and the routes taken by Ukrainian drones)—including Russia’s Far East.

In some regions, mobile internet has been switched off for months. For example, it has been unavailable in Udmurtia since the summer. A resident of the Udmurt capital, Izhevsk (a major site for Russian defense production), told Faridaily he was used to going into cafes and shops to use the Wi-Fi in order to read the news, or order a taxi. Similarly, there has been no mobile internet in the city of Volgograd for a month—and it’s unclear when (or if) it might be restored. Reports suggest local providers have been inundated with requests for fixed-line internet, use of cash is widespread, and schools no longer have a problem with kids being addicted to their smartphones. And in the city of Tula south of Moscow, the authorities are installing public Wi-Fi at bus stops.

As the number of shutdowns has ballooned, officials in at least 57 regions have introduced so-called “whitelists”—a list of websites that are unaffected. These include government portals, some banking apps, social networks, messengers, streaming services, and marketplaces. Some fear whitelists could soon become the day-to-day online reality for most Russians.

The unstoppable rise of ‘Russia’s WeChat’

Just a few weeks after the May shutdowns, Russia’s Digital Development Minister Maksut Shadayev told President Vladimir Putin that messenger MAX, which had been launched a few months earlier by internet company VK, would be transformed into a “national messenger” similar to China’s WeChat. MAX could, Shadayev promised, provide government and banking services, be a platform to sign sales and lease agreements, and serve as a digital ID.

A few weeks later, Russia passed a law integrating MAX with Gosuslugi, the widely-used government services portal, and the Goskey electronic signature service. Putin also issued a directive for the government to support MAX.

However, a Kremlin-led PR campaign to promote MAX has been dogged by public suspicion—particularly when it comes to MAX’s relationship with the FSB. This centers on Internet company VK, which created MAX and is more famous for its social media network Vkontakte (Russia’s “equivalent to Facebook”). VK is ultimately controlled by state-owned gas giant Gazprom. In 2018, case materials from the criminal prosecution of Vkontakte users showed VK had provided data to law enforcement without court orders.

As a result, many believe MAX is tracking its users, harvesting data from smartphones, and sharing chats and calls with the FSB. Since MAX is a closed-source app, some of these claims are impossible to confirm. Perhaps tellingly, a State Duma deputy claimed in September that MAX “does not spy on users.” VK said in October that MAX has 50 million registered users.

Squeezing WhatsApp and Telegram

As the development of MAX continues apace, so discussions about blocking WhatsApp (Russia’s most popular messaging app with 97.4 million monthly users), and Telegram (90.5 million monthly users) have intensified. The authorities have long been irritated by the failure of WhatsApp and Telegram to localize Russian user data, as well as their refusal to provide user data to the FSB. Given that online watchdog and censor Roskomnadzor last year blocked Viber—Russia’s third most popular messenger— discussions about banning WhatsApp and Telegram should be taken seriously.

In August, Roskomnadzor blocked voice calls in WhatsApp and Telegram. Although the official explanation was that this was necessary to stop scammers, data from Russia’s Central Bank shows scammers use mobile and landline calls three times more often. While some said the curbs are part of an effort to push Russians toward MAX by degrading the functionality of its competitors, others pointed out that Russian telecom operators have long advocated to limit internet calls as they make fixed-line phones less profitable.

At the end of October, Roskomnadzor began experimenting with total blocks on Telegram and WhatsApp in some regions (justifying the move by citing the need to fight scammers). It also emerged mobile operators were blocking the text messages and calls that WhatsApp and Telegram use to verify new users.

Fines for searching for ‘extremist content’

Perhaps the most widely discussed element of Russia’s online crackdown was a Sept. 1 law imposing fines of up to 5,000 rubles ($62) for “intentionally searching” for “extremist materials” online. This was an immensely significant step: Russia has never previously punished people for consuming blocked content, or using prohibited services—in effect, simply for reading.

As with many Russian laws, the text is vague, leaving ample room for interpretation. The country’s official list of “extremist material,” which is managed by the Justice Ministry, currently includes over 5,000 entries, including books, films, articles, and songs—meaning users could be fined for searching for content without knowing it has been designated extremist.

One of Russia’s most well-known extremist organizations is the Anti-Corruption Foundation founded by opposition politician Alexei Navalny, who died in a Russian prison in 2024. Under the new law, just searching for YouTube investigations by the Foundation is an offense.

So far, the only known prosecution has been of a student from the Ural Mountains city of Kamensk-Uralsky, who is accused of searching for information about Ukraine’s Azov regiment, and a Ukraine-backed paramilitary group reportedly made up of Russian citizens. How exactly the user’s search history ended up in the hands of the FSB is unknown.

• Intensifying the fight against VPNs

In recent months, the Kremlin has stepped up its efforts to block Virtual Private Networks (VPNs), which Russians are dependent on to get around online censorship. According to pollster Levada Center, 20 percent of Russians use VPNs—a figure that rises to 40 percent among young people. While VPNs remain legal, the authorities took the first step toward criminalizing them in July by making use of VPNs an “aggravating circumstance” in Russia’s Criminal Code. No-one has yet been prosecuted under this provision, but it’s likely it will be used to boost the punishments meted out in cases against those accused of “searching” for “extremist material” online.

• SIM-cards blocked after trips abroad

Earlier this month—with only a few days advance warning—Russia blocked people from using their SIM cards on returning from a trip abroad. Again, the reason given by officials was to combat Ukrainian drones that use mobile internet to navigate. As of Nov. 10, if a SIM has used international roaming services, when it crosses the border into Russia it will be unable to access mobile internet, and text messaging services, for 24 hours. This applies to both foreign, and Russian-issued, SIMs. On paper, you can lift the block by completing a short online check, but there have been complaints that this service is frequently inaccessible.

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Adaptation, not resistance

The Russian internet is steadily evolving into a closed ecosystem built around domestic services (especially messengers and social networks), where security—at least as defined by the state—takes precedence over freedom.

And a survey published earlier this month by the state-controlled VTsIOM pollster showed that 40 percent of Russians are opposed to internet controls (compared to 25 percent who support them). Among young people, opposition rises to 60 percent.

Nevertheless, there is no prospect of any serious resistance, or anger directed at the Kremlin. “People are obliged to accept all the restrictions,” said an executive at a Russian internet company. “Firstly, because they are presented as security measures, and, secondly, because there is no way to resist.” A different internet company executive added: “This is the new reality we’ll have to get used to—there are never rollbacks or relaxations in our country.”

It appears Russians have become accustomed to the creeping digital restrictions and, for the most part, see them as just another part of everyday life. Some believe they are genuinely needed for security reasons; others do not want to risk imprisonment in order to express their unhappiness. Either way, the focus for most is on adapting, rather than resisting.

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This time we are looking at:

• Why the Kremlin’s decision to call-up Russia’s reservists for mandatory military service is a covert form of mobilization;

• How the end of Russia’s economic boom is affecting consumers.

We also briefly examine the governor KPIs that the Kremlin will likely use in next year’s parliamentary elections, and a crackdown on Halloween celebrations.

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Kremlin fears Ukrainian drones—and the word ‘mobilization’

The Russian authorities will call-up the country’s reservists in order to better guard key infrastructure sites from Ukrainian attacks.

Russia is poised to mobilize about 30,000 reservists as it struggles to find the manpower to deal with Ukrainian drone attacks. Russian President Vladimir Putin signed a law on the use of reservists Tuesday after legislation was rushed through parliament. Putin will also shortly issue a special decree (as required by the law), and an official told Faridaily the government will publish a document clarifying the call-up procedure.

While such a step is—in effect—a form of mobilization, no formal documents use the word “mobilization.” Officials are also careful to avoid the term. The Kremlin is wary because Russia’s partial mobilisation in 2022—in which about 300,000 men were drafted as the army suffered battlefield reversals—led to a drop in Putin’s popularity.

Russia’s decision to tap its military reservists for the war effort is not only a recognition that Ukraine’s summer drone campaign has succeeded in inflicting serious damage. It is also yet another sign that the Kremlin is not in the market for compromise when it comes to negotiations with the West, and has not renounced its maximalist war aims.

The legislation on reservists signed by Putin earlier this week was not explicit about how reservists would be used. Instead, it stated they will be sent to special “training camps” in which participation will be mandatory. However, it’s clear that this actually means reservists will be deployed to guard infrastructure facilities across Russia.

• Russia’s military reserve, which was set up in 2015, is the equivalent of the United States Army Reserve, or the United Kingdom’s Territorial Army. Reservists are those who have experience in the army or security forces, and have signed a contract of up to five years with the Defense Ministry, the National Guard, or another security agency.

  In peacetime, reservists are only required to attend annual training camps. For the rest of the year, they live like ordinary civilians. Current monthly pay with the Defense Ministry is usually up to 9,700 rubles ($120). However, in regions bordering Ukraine, it can be higher.

Officials have not hidden that the need for reservists is a result of Ukraine’s drone strikes on oil refineries, which have sent gasoline prices soaring 13 percent this year. The legislation was proposed by the Defense Ministry, and passed by parliament in just two days.

“The situation is difficult,” Anatoly Kartapolov, head of the State Duma’s Defense Committee, said last week. “The country is under regular enemy drone attack.” According to Kartapolov, it’s not only oil refineries that need defending, but also other infrastructure sites. He said there were not enough National Guard, police, and military personnel to do the job.

The number—and frequency—of Ukrainian drone raids have increased significantly this summer. While many of the attacks have been on oil refineries, other infrastructure targets have also been hit. For example, the southern Russian port of Tuapse was attacked last week, reportedly causing damage to moored vessels, and an oil pipeline.

How many reservists will be called up? Could they be sent to Ukraine?

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The U.S. decision to sanction Russian oil majors Lukoil and Rosneft will have “certain consequences” for the economy, admitted Putin. Together, Lukoil and Rosneft account for about 50 percent of Russia’s oil production.

While Putin called the new U.S. sanctions unfriendly, the tone of his remarks suggested he did not want (at least for now) to burn bridges with Washington. He avoided angry words, refrained from criticizing Trump, and said he was ready for further dialogue.

Taxes from oil and gas production account for about 22 percent of Russia’s budget revenues, but they are also the largest source of foreign currency for the economy. Hydrocarbon exports affect both the value of the ruble, and economic activity. However, whether revenues will drop due to the U.S. sanctions remains an open question. Much will depend on whether they are adhered to by major importers of Russian oil (India and China); whether Russian oil companies can find workarounds; and the oil price. The success of the U.S. plan to push Putin toward a compromise with Kyiv, therefore, also depends on these factors. We will cover the impact of U.S. sanctions on the Kremlin’s economic power, as well as how Putin’s inner circle perceive Trump’s change of position, in an upcoming newsletter.

This time, we focus on topics that, at first glance, may seem unrelated. But they are vivid illustrations of how life in Russia has changed since the start of the war:

• Momentum gathers behind a nationwide law to restrict the availability of abortions;

• Russian motorists protest plans to raise the controversial car scrappage fee.

We also look briefly at the designation of leading opposition figures as “terrorists,” and the Central Bank’s decision to cut interest rates by 0.5 percent.

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Abortion restrictions

Putin’s obsession with Russia’s fertility rate, as well as the growing influence of Orthodox and conservative values in the Kremlin, is likely to lead to anti-abortion legislation.

Russia appears to be moving toward a nationwide law to ban the “coercement” of women into abortions amid Putin’s ongoing fixation on the country’s demographic crisis. Such a law was publicly backed last week by a State Council commission.

As many as 25 Russian regions have introduced such a law over the last two years, but passing it at a national level would mark a significant acceleration in Russia’s lurch toward embracing a pro-life agenda. It would also illustrate—yet again—the growing power of Orthodox, and conservative, groups over policymaking.

What, though, does “coercing” people into abortions mean? In existing regional laws, it’s defined as “actions aimed at compelling a pregnant woman to terminate her pregnancy through persuasion, offers, bribery, or deception.” In practice, it’s used to pressure private clinics (where abortions are quicker and easier to get than in the state system) to stop offering the service. Penalties for violating the existing laws include fines of up to 5,000 rubles ($61) for individuals, and 500,000 rubles for organizations.

Restricting abortions is one of several crude methods being used to combat the country’s demographic crisis—another is payments to teenage mothers, including those who are still in high school. One source close to the government said Putin sees increasing the birth rate as a task of historical significance. Last year, Putin told officials to “start and end their day thinking about fertility.”

The president’s obsession means increasing the fertility rate remains a priority for officials at all levels, who are likely to continue to lobby for measures short of an outright abortion ban: for example, PR campaigns against abortion, banning “childfree propaganda,” introducing (and increasing) fines for “coercing” people into abortions, and pre-abortion counseling.

Fertility rates are even one of the metrics the Kremlin uses to assess governors. “Regions actively exchange practices. Someone bold tries something, others watch: no backlash? Let’s try it too,” said a source close to the governor in one of Russia’s northern regions, describing a surge in fertility-boosting measures.

However, the Kremlin also knows it has to tread carefully when it comes to abortions. Firstly, Russians are opposed to a full ban, according to Kremlin polling described to Faridaily. “This idea [of a full ban] was not supported at the highest level—the president and his administration,” said an official who works on demography policymaking. who suggested the reason was a wariness about the public response. A source in the Ministry of Health confirmed this. “Banning abortions is too risky,” he said, “the population won’t accept it.” Secondly, access to abortion is protected by the Russian constitution, and laws already on the statute books. Attempts to change legislation to ban abortions would attract nationwide attention, with unpredictable consequences.

The campaign for abortion restrictions is led by the Russian Orthodox Church, and influential conservatives (like, for example, tycoon Konstantin Malofeev). Opposing them are officials who are wary of a return to illegal abortions, and the resulting increased mortality. Aware of how divisive the topic can be, Putin rarely addresses the issue in public.

Women are the most vocal opponents of abortion bans, according to a source involved in demographic policymaking. Russian polling agencies, seemingly aware of the Kremlin’s position, publish little data on attitudes toward abortion. However, a December 2023 poll by the Kremlin-aligned FOM agency showed 75 percent of women, and 54 percent of men, oppose an abortion ban. In an October 2024 poll by FOM, when asked, “Which fertility-boosting measures are most effective?” 26 percent said increased state financial support for families (and only 1 percent said banning abortions).

Some officials told Faridaily they had even been chided by relatives for backing controversial pro-fertility measures. “My 75-year-old mother turned up and started telling me off,” said the official working on demographic policymaking. “She said: ‘Don’t meddle in that sort of thing; it’s a woman’s business’.”

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• Why Russia has reversed years of claiming the U.S. is its number one enemy and now has Europe in its sights;

• How ineffective regulation and long-standing problems have made Russia’s oil refineries an easy target for Ukrainian drones, triggering a gasoline crisis.

We also look briefly at a record number of treason cases in the first half of this year, and a series of political attacks on the liberal Yabloko party.

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Foreign policy volte face

At the same time as Putin’s rhetoric becomes more anti-Europe, so Russian drones are increasingly disrupting European airspace.

Russian President Vladimir Putin delivered a geopolitical rant last week at the Valdai Discussion Club, a forum of Russia experts, which appeared to crystallize a new foreign policy direction. These were Putin’s first public comments on foreign affairs for several weeks, and he made it abundantly clear that Europe—not the United States—is now Russia’s primary adversary. This is a major break with the official public narrative of the last decade, when Washington was always presented as Russia’s number one enemy.

Significantly, the Kremlin’s new position is not just confined to rhetoric. In recent weeks, drones, likely of Russian origin, have regularly entered the airspace of European countries, and cyberattacks—also presumably Russian-directed—have disrupted the operations of European airports. German Chancellor Friedrich Merz said this week that the Kremlin is waging a hybrid war against his country.

At Valdai, Putin argued that European elites were fueling hysteria over the possible outbreak of war with Russia, and that Europe’s hawkish position on the fighting in Ukraine means it’s impossible to find a compromise peace.

Putin added that, while the Kremlin has no intention of fighting NATO, it was closely monitoring “Europe’s growing militarization” and was prepared to take reciprocal military measures if necessary.

Asked about the drone incidents in European cities, Putin jokingly promised not to do it anymore. But then he went on to claim—seriously—that Europeans are launching drones themselves to “escalate tensions” and increase defense spending.

Of course, Russian officials have criticised Europe in the past, but this criticism was almost always accompanied by the claim that European leaders were entirely dependent on Washington—and were not capable of independent decisions. They were, in other words, puppets. The Kremlin’s designation of the U.S. as the world’s leading anti-Russia force was even formalized in state documents. For example, a 2023 update to Russia’s “foreign policy concept” claimed the “U.S. and its satellites” were waging a hybrid war against Russia.

However, after Donald Trump’s return to the White House, the Kremlin began toning down its anti-U.S. rhetoric, while simultaneously intensifying criticism of Europe. This criticism escalated in August when European leaders, together with Ukrainian President Volodymyr Zelensky, outlined their vision for an end to the war. The Kremlin reacted particularly negatively to Europe’s intention to continue providing military aid to Kyiv in peacetime.

This portrayal of Europe as Russia’s main adversary is also peddled aggressively by Russian propaganda, with state-owned television regularly broadcasting claims that Europe is fueling the war in Ukraine. The belief that Europe is preventing an end to the war in Ukraine is also widespread among Russian officials (even among those who did not support the full-scale invasion in 2022).

“Instead of saving what remains of Ukraine, Europeans are provoking Putin to continue the war,” said a source close to the Russian government. European leaders are “in a religious frenzy” when it comes to anti-Russianness, said another source close to the government, and are unwilling to end the fighting in Ukraine.

Of course, Putin’s newly-discovered anti-Europe messaging echoes the criticism of Europe that has been made by Trump. In other words, Putin is trying to align himself with the U.S. and, at the same time, exacerbate the divisions between Washington and European capitals. However, Putin’s foreign policy rant at Valdai was also an acknowledgement that there is a deadlock when it comes to diplomatic efforts to bring an end to the fighting in Ukraine. There has been no breakthrough—not even behind-the-scenes—following the Trump-Putin summit in Alaska that was held in August.

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As in other years since the full-scale invasion of Ukraine, this year’s budget, which was submitted to pa…

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• How a sluggish economy has forced the Russian government to raise taxes;

• What lies behind the resignation of Putin confidante Dmitry Kozak? Why was it unusual? And what will his departure mean?

• L…

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• The state of Russia’s economy and its finances as experts argue over whether the economy is in recession, or “just” stagnating;

• Why Putin picked young security official Igor Krasnov as chief justice of Russia’s Supreme Court;

• The public spat that suggests deceased opposition leader Alexei Navalny’s Anti-Corruption Fund (FBK) is in crisis;

• A huge religious procession through Moscow organized by the Orthodox in conjunction with far-right groups.

Also, have a look at our new section at the end of the newsletter where we recommend some extra reading!

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Stagnation or recession? Either way, the boom in the Russian economy is over

All observers agree that the economic boom of 2023–2024 has now fizzled out, and will not return any time soon.

Officials and economists have not yet reached a consensus view on whether the Russian economy has entered a recession or is “just” stagnating. In part, this is because the correct terminology depends on GDP growth figures, and with different methodologies, you get slightly different results. German Gref, the head of state-owned Sberbank, described the economy as in “technical stagnation” at an economic forum last week in Vladivostok. The term generated widespread discussion—and some mockery—because it appeared to have been chosen by Gref (or his aides) to avoid saying “recession.”

Either way, the “recession versus stagnation” debate does not have a lot of significance: all observers agree that the economic boom of 2023–2024 has now fizzled out, and will not return any time soon.

Russia’s Central Bank reduced interest rates on Friday by 1 percentage point to 17 percent—the latest in a series of cuts. The Central Bank explained its decision as a response to falling prices: and it’s true that consumer prices fell 0.4% last month (one of the best monthly results for over two decades). The main reasons were a seasonal decline in vegetable and fruit prices, which dropped earlier than usual due to a successful harvest, and a strong ruble, which curbs price increases for imported goods. However, these are one-off factors. And they are not the only reasons, perhaps not the most important: inflation is slowing because the Russian economy is in the grip of a slowdown.

The problems have been particularly noticeable in Russian industry, where the only remaining growth points are in sectors tied to defense. The civilian industrial sector has been in recession since early this year, with the contraction accelerating in July (August data is not yet available). On the one hand, this is a result of Russia’s tight monetary policy, which has limited lending and cooled demand. On the other hand, it stems from issues like labor shortages, and difficulties sourcing technology. Some of these issues have been caused by Western sanctions, but sanctions mostly tend to exacerbate long-standing structural problems in the Russian economy.

Russia’s consumer boom is also in its final stages. Unsecured consumer lending is falling, which reduces demand for durable goods (that people prefer to buy on credit). Car sales have collapsed, and surveys show steadily worsening consumer sentiment. Although wage growth continues, businesses have been warning for months that it cannot continue for much longer.

Russia is also grappling with its state finances. Although revenue slightly exceeded spending in August, the Ministry of Finance said Wednesday that the deficit for the first eight months of this year still exceeds the deficit planned for the entirety of 2025—about 4 trillion rubles ($47 billion). Managing this shortfall is a challenge for the Ministry of Finance, albeit not yet a critical one, and Finance Minister Anton Siluanov has already secured Putin’s public support for more borrowing. Currently, Russian debt is just over 16 percent of GDP, meaning the Ministry of Finance has room to increase borrowing without damaging the economy. Siluanov has acknowledged it will be difficult to find government bond investors as the pool of buyers is currently small. However, most bonds are bought by Russia’s largest state-owned banks, which are always ready to lend more if they are asked (especially if the Central Bank gives them liquidity, or turns a blind eye to problematic corporate loan portfolios).

For the moment, Russia’s economic slowdown is not proving too painful for the Kremlin (falling inflation even allows officials to claim an economic victory). Of course, the situation would change if there was a full-blown recession that would, inevitably, bring long-standing economic problems to the fore, and create painful new pressure points. But this does not seem imminent. As a result, there is no sign of the emergence of any significant economic constraints on the Kremlin’s ability to wage war in Ukraine.

Security official to head Russia’s Supreme Court

In a post-Soviet first, the chief justice of Russia’s Supreme Court will be a criminal investigator who has never worked as a judge.

Russian President Vladimir Putin passed over several close allies when he decided to put forward Prosecutor General Igor Krasnov, aged just 49, to be the next chief justice of Russia’s Supreme Court at the end of August. Krasnov looks set to be formally appointed to the position later this month.

The role of chief justice is an important one for Russia’s elite—especially for the group of St. Petersburg lawyers who are part of Putin’s inner circle. For many years, ex-president Dmitry Medvedev (one of those St. Petersburg lawyers) was rumored to be a leading candidate. However, Medvedev was one of those passed over when the position became vacant earlier this year following the death of the previous incumbent, Irina Podnosova (an ex-classmate of the Russian president). The other was senior security Alexander Bastrykin, the veteran head of the powerful Investigative Committee.

While we can only guess at Putin’s motives for choosing Krasnov, it’s possible that his elevation is part of a trend in which a younger generation of officials is brought to the fore. Putin himself turns 73 next month, and many of his close allies in top jobs are the same age, or even older.

Over the course of his career, Krasnov has handled many high-profile criminal cases (sometimes reporting directly to Putin), and has proven himself to be politically astute. For instance, he was in charge of the investigation into the 2015 murder of opposition leader Boris Nemtsov. While Krasnov identified the perpetrators, who were put on trial and sentenced to long jail terms, he made no attempt to identify the masterminds of the assasination. Krasnov became one of Russia’s most important security officials when he was made Prosecutor General in 2020. Under his leadership, the Prosecutor General’s Office has been particularly active in enforcing political repression, and known for overseeing the largest property redistribution in Russia since the 1990s, which accelerated dramatically after the full-scale invasion of Ukraine.

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