Five Saxo Bank-Type ‘Shocking Predictions’ for Russia in 2024

Paul Goble

            Staunton, Jan. 4 – Denmark’s Saxo Bank has become famous for offering “shocking predictions” about the future, predictions that many are reluctant to make because they challenge conventional wisdom. But Maksim Blant says that Russia so often violates conventional wisdom that it is useful to offer Saxo Bank predictions for it.

            The specialist on the Russian economy at Radio Liberty offers five such “shocking predictions” for the coming year (svoboda.org/a/ekonomika-voyny-pyatj-shokiruyuschih-prognozov-dlya-rossii/32756491.html):

            First, Blant says, Russia’s war in Ukraine “will not end,” and the conflict will place ever greater burdens on the Russian economy, leading to stagnation in the civilian sector and then to a reduction in the production of consumer goods. As a result, the war, whatever happens on the battlefield, will have a growing impact on the home front.

            Second, the price of oil will drift downward to 40 US dollars a barrel, the result of falling international demand because of slowing growth in China and many other economies and the gradual shift to electric vehicles in some. That will mean that Moscow will have to find other sources to finance its war.

            Third, because the Kremlin is committed to “the de-dollarization” of the Russian economy, the ruble will fall against both the dollar and the euro, currencies that by the end of the year are unlikely to be traded openly in Russian markets but only illicitly on black markets. As a result, the ruble will fall well below its current rate and could reach 150 per dollar by year’s end.

            Fourth, because the government will be spending more on the war than it can take in in taxes, that will put additional pressure on the ruble and cause inflation to jump by as much as 25 percent in 2024, far above even the most pessimistic assessments of the rate of price increase in Russia this year.

            And fifth, because Moscow will fight price increases administratively, that is likely to lead to shortages of many goods. And that in turn is likely to force many regions to introduce rationing by the end of the year. It is also likely to lead to the opening of special stores for the elites where goods will be available and at lower prices.