High oil prices and tax hikes aren’t enough to offset war spending and keep Russia’s budget on track

This year’s St. Petersburg Economic Forum turned from a showcase of Russian achievements into a mirror reflecting the problems the full-scale war has created for the country. Officials showed no signs of panic — aside from the usual controlled outbursts. On the contrary, Putin assured investors that the economy was in fine shape and that the slowdown in growth was a deliberate, controlled process. Meanwhile, the budget has begun to feel the effects of the oil price spike and the VAT increase. But the gap in the treasury will still end up larger than the government planned by year’s end. And as the war continues, the economy’s structural problems will only deepen.