Russia on the brink: the warning signs piling up

Russia on the brink: the warning signs piling up

On December 16, 2024, Angstrom-T, Russia's great technological hope for chip manufacturing, went bankrupt after failing to pay 9.9 million dollars in debts. The news, reported by specialist media, came at a time when the Russian economy is showing signs of fatigue that some analysts compare to the run-up to a systemic crisis. But is Russia really on the verge of total collapse?

The stock market thermometer and the shadow of hyperinflation

While Spain's IBEX 35 rose almost 30%, the Russian stock market crumbled with a 25% plunge. The figures don't lie: the country's largest property developer, Shamolet, has lost more than 70% of its market value over the past year, and Russian sovereign bonds are trading at yields of 23%, levels that in any other advanced economy would be considered extreme stress. Soaring inflation threatens to spiral into hyperinflation if the central bank fails to contain it.

Demographics and the war front: a hole that won't close

The Ukrainian front continues to absorb tens of thousands of young lives every month, in a country where the birth rate was already in free fall before the conflict. The combination of military casualties, emigration and low fertility paints a demographic picture that some describe as unsustainable in the medium term. On top of this, there is a perception that the Caucasus republics, such as Chechnya or Dagestan, could exploit any weakness of the Russian state to reignite old tensions.

Raw materials and alliances: cushion or mirage?

Against the pessimism, some point out that Russia is a country with vast reserves of raw materials, energy, self-sufficient agriculture and almost no public debt. It also has partners such as China and India which, in theory, will not let it fall because it is a necessary piece on the global chessboard. However, Western sanctions have cut off access to critical technology, and although China buys Russian oil and gas, the terms are not as favourable as before.

The debate remains open: while some see collapse within months, others believe the country will hold out for years. What is undeniable is that the financial and demographic indicators point to a trend which, if not reversed, leads to an outcome nobody would want to witness.