The ruble has collapsed, and refineries are standing still: How is the Russian economy surviving as the third year of the war approaches?

Almost all the available Russian economic resources have already been used, and the country finds itself in a unprecedented situation. The unemployment rate has fallen to a historic low of 2.4%, and the personnel shortage continues to grow, the head of the Russian Central Bank said. 73% of enterprises suffer from personnel shortages, and the capacity utilization at factories exceeds 80%, which is also a record.

Next year, the economy may be on the verge of stagnation: GDP will increase by only 0.5-1%, and growth rates for investment and private consumption may drop to zero.

At the same time, due to sanctions pressure, the ruble’s official exchange rate against the dollar and the euro exceeded ₽100 for the first time since October 10, 2023.

The amount of idle oil refining capacity increased by 34.4% in November. The amount of primary processing during January-November reached 39.6 million tons, which is 5.8 million tons (+17%) higher than last year’s figure. Moreover, one of Russia’s largest refineries, Nyzhnyohorodnaftoorgsyntez, was forced to cease production due to the breakdown of Western equipment.