No room for Russia to cut rates this year as inflation climbs, economy overheats

By Alexander Marrow August 2, 20249:10 AM EDTUpdated 20 days ago

Russian key rate seen ending 2024 at 18%Rouble to weaken to 96.1 vs dollar in 12 monthsRussia's GDP growth forecast at 3.6% in 2024Inflation expected to end 2024 at 6.9%

Aug 2 (Reuters) - Russia's central bank has no room to lower rates from 18% this year, a Reuters poll showed on Friday, with analysts forecasting inflation above the bank's 4% target in an overheating economy propelled by military production and consumer spending.

Russia's economic growth relies on heavily. large-scale government spending on arms production as Moscow funds its war in Ukraine, contributing to soaring real wages in a tight labour market with unemployment at a record low.

Kursk offensive fails to divert enough troops as Russians advance to key logistics hub in Donbas

The Ukrainian military’s ability to sustain its eastern defensive positions is at risk as Russian forces close in on Pokrovsk in Donetsk Oblast. The town’s strategic railway junction and road network are vital for moving troops, equipment, and evacuating wounded soldiers from the front lines.
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The town of Pokrovsk, a crucial logistics center for Ukrainian forces in eastern Donbas, is under increasing threat from advancing Russian troops, according to BBC.

Despite Ukraine’s attempts to divert Russian troops by seizing territory in Russia’s Kursk Oblast, the Russian offensive in eastern Donbas has intensified.

Russian forces are now believed to be less than 10km (6 miles) away from the town, which serves as an important railway and road junction, BBC reports.

The strategic importance of Pokrovsk stems from its role in supplying and reinforcing Ukrainian troops on the eastern front, as well as evacuating wounded soldiers.

Military expert Mykhaylo Zhyrokhov emphasized the town’s significance, stating, “If we lose Pokrovsk, the entire front line will crumble,” as per BBC.

The BBC notes that the fall of Pokrovsk could have far-reaching consequences for Ukraine’s defensive positions in the region.

Analyst Pavlo Narozhny warned that the loss of Pokrovsk would jeopardize other strategically important locations, such as Chasiv Yar, which offers commanding views over the surrounding area.

In response to the advancing threat, Ukrainian authorities ordered the evacuation of families with children from Pokrovsk. This follows an earlier exodus of thousands of residents in recent months as Russian forces drew closer.

The town, formerly home to about 69,000 people, played a significant role in Ukraine’s industrial landscape. It houses the country’s largest producer of coking coal and has been dubbed the coal-mining capital of Ukraine since the capture of Donetsk in 2014.

A Ukrainian soldier stationed in the area, identified as Ostap, told the BBC’s Ukrainecast podcast that if Pokrovsk falls, there will be a total destruction of the cities and a lot of dead people.https://euromaidanpress.com/wp-content/uploads/2024/08/East-of-Pokrovsk-Battle-Map-Draft-August-23-2024-1-715x1024.png

The BBC also suggests that the Kremlin’s media could use such a victory to offset the embarrassment of Ukraine’s recent territorial gains in the Kursk border region.

Earlier, the Institute for the Study of War (ISW) reported that Russian forces are making slow but gradual progress toward Pokrovsk in Donetsk Oblast, Ukraine.


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Despite Ukraine’s Kursk invasion gamble, Russia is closing in on a big victory

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The key city of Pokrovsk is being evacuated under a Russian onslaught, as heavily outnumbered Ukrainian soldiers find their comrades’ success across the border is doing nothing to relieve the strain

In phone calls with The Sunday Times, Ukrainian military commanders were at pains to explain the apparent collapse around Pokrovsk, some blaming a lack of artillery shells, others new Russian tactics or the use of glide bombs and electronic warfare. They agreed, however, that one of the biggest problems they face is being greatly outnumbered.

“The situation is difficult, we are losing positions, the enemy is pushing us back,” said Captain Dzvenyslava Rymar of the 47th brigade, which is involved in combat near Pokrovsk.

“People are exhausted,” she added. “We need fresh people. No matter how well-trained our fighters are, the Russians still manage to crush us with their numbers. It’s not possible to hold the line when there are just two or three of you and ten to 20 of them coming at you.”

Ukraine had hoped its recent cross-border invasion of Russia’s Kursk region, 200 miles to the northwest, might relieve the strain on its troops in the Donbas region, where Moscow’s forces have been held at bay for most of the war, but are now applying almost intolerable pressure.

It did not. “It has had no effect on our part of the front line,” said Rymar. “Russian assaults are continuing permanently.”

If Pokrovsk falls, it will be the largest population centre taken by the enemy since the Russians seized Bakhmut in May last year. The local administration has left and its 53,000 inhabitants are preparing for the worst.

Lt Mykhailo Luzhetsky, 36, of the 109th brigade, which is fighting near the city, spoke of a “depressingly sad atmosphere in Pokrovsk”, adding: “We hope everything will be all right, but we understand that the situation is not good.”

Even so, the Kursk operation to the northwest had “greatly lifted the spirits” of Ukrainian soldiers and civilians alike, he said. Ukraine has captured almost 500 square miles of Russian land and hundreds of Russian soldiers. It has blown up three bridges with western-supplied rocket systems, to prevent the enemy’s retreat or resupply.
“Here in the east we are jealous,” added Luzhetsky: “While they are moving and advancing in the Kursk region, we are stuck in these trenches like in the First World War.”

​​​​​​​ “But Russia keeps going,” said Matthew Savill of the Royal United Services Institute (RUSI), a military and security think tank in London. “The Russian mindset seems to be, ‘We took tens of millions of casualties in the Second World War and we can keep going’.”

He sees Ukraine’s invasion of Russia as “either an act of genius or an act of desperation”, adding: “Rather than lose ground slowly in the east with nothing to show for it, Ukraine needed to change the narrative — to say ‘yes, we’ve lost ground in the east, but we can still manoeuvre and make things difficult for the enemy’.”

The final verdict, Savill predicted, would depend on the “cost Ukraine has to pay” for its lightning cross-border assault. If the operation forces Russia to “thin out” its front line and “creates a sea change in international support, with renewed equipment for Ukraine and a change in the caveats about its use of western long-range weapons in Russia, that would also be a win”, he said.

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Russian President Vladimir Putin’s approval rating has reached a historic low since the onset of the full-scale invasion of Ukraine, as reported by the Russian polling agency VTsIOM (All-Russian Public Opinion Research Center) on 23 August 2024.

The decline comes amid intensified Ukrainian military activity in Russia’s Kursk region. However, it is important to note that these figures have not been independently verified.

According to WCIOM, the approval rating of Putin’s presidency dropped by 3.5 percentage points during the week of 12-18 August 2024, settling at 73.6%. This represents a significant decrease from the previous week (5-11 August), when the approval rating stood at 77.1%. Survey participants were asked a straightforward question: “Do you generally approve or disapprove of the president’s activities?”

In tandem with the drop in the approval rating, Putin’s trust rating also fell during the same period. WCIOM data indicates that the level of trust in the Russian president declined by 2.6 percentage points, from 80.8% to 78.2%. Respondents were asked, “Do you trust or not trust Vladimir Vladimirovich Putin?”

These figures mark the steepest drop in both approval and trust ratings since Russia’s full-scale invasion of Ukraine in February 2022. According to the data reported by “Agency,” this decline highlights the most significant fluctuations in support for the Russian president during the ongoing conflict.

Historically, Putin’s approval rating dipped below 73.6% during the summer and autumn of 2023, following the armed mutiny led by Yevgeny Prigozhin, the founder of the Wagner Group, a private military company. During this period, Putin’s approval rating hit a low of 72.6% in the week of 7-13 August 2023.

Putin’s trust rating has also experienced notable declines throughout the war. On two occasions, it fell below 78%—first during the autumn and winter of 2022-2023, following the Russian military mobilisation, and again during the summer and autumn of 2023, after Prigozhin’s rebellion. The lowest trust rating recorded was 76.7%, which occurred between 31 July and 6 August 2023.

As the global leader approval ratings provide a fascinating insight into the politics across various nations, here are the top ten most popular global leaders as of July 2024:

1. India Prime Minister Narendra Modi (69 per cent)
2. Mexico President Andres Manuel Lopez Obrador (63 per cent)
3. Argentina President Javier Milei (60 per cent)
4. Switzerland Federal Councillor Viola Amherd (52 per cent)
5. Ireland's Simon Harris (47 per cent)
6. UK Prime Minister Keir Starmer (45 per cent)
7. Poland's Donald Tusk (45 per cent)
8. Australia PM Anthony Albanese (42 per cent)
9. Spain PM Pedro Sanchez (40 per cent)
10. Italy PM Giorgia Meloni (40 per cent)

Poorly trained recruits contribute to loss of Ukrainian territory on eastern front, commanders say

KYIV, Ukraine (AP) — Some new Ukrainian soldiers refuse to fire at the enemy. Others, according to commanders and fellow fighters, struggle to assemble weapons or to coordinate basic combat movements. A few have even walked away from their posts, abandoning the battlefield altogether.

While Ukraine presses on with its incursion into Russia’s Kursk region, its troops are still losing precious ground along the country’s eastern front — a grim erosion that military commanders blame in part on poorly trained recruits drawn from a recent mobilization drive, as well as Russia’s clear superiority in ammunition and air power.

“Some people don’t want to shoot. They see the enemy in the firing position in trenches but don’t open fire. ... That is why our men are dying,” said a frustrated battalion commander in Ukraine’s 47th Brigade. “When they don’t use the weapon, they are ineffective.”

The accounts come from commanders and soldiers who spoke to The Associated Press on condition of anonymity in order to speak freely about sensitive military matters. Others spoke on the condition that they be identified only by their call signs in keeping with Ukrainian military protocol.

Commanders say the recruits have contributed to a string of territorial losses that enabled Russia’s army to advance, including near the city of Pokrovsk, a critical logistics hub. If it falls, the defeat would imperil Ukraine’s defenses and bring Russia closer to its stated aim of capturing the Donetsk region. Russian soldiers are now just 10 kilometers (6.2 miles) away.
Adding to Ukraine’s woes are Russia’s huge advantage in manpower and its willingness to accept staggering losses in return for capturing small objectives.

The recently conscripted Ukrainians are a far cry from the battle-hardened fighters who flocked to join the war in the first year of the full-scale invasion. The new troops lack even a minimal level of training, commanders and soldiers from four brigades defending the Pokrovsk area said.

They described having to plan operations with infantry who are unable to shoot targets and uninformed about basic topography. Some recruits simply lacked faith in the battle plans of their superiors and walked away from prepared positions.

Frustrated with the quality of the new conscripts sent to the front line by territorial recruitment centers, commanders are now seeking to conduct their own mobilization drives to better screen and train new fighters, multiple commanders and soldiers said.

“The main problem is the survival instinct of newcomers. Before, people could stand until the last moment to hold the position. Now, even when there is light shelling of firing positions, they are retreating,” said a soldier with the 110th Brigade.

Not everyone is turning around and running away from battle, he added.

“No, there are motivated people, but they are just very, very few,” he said. “The position is held as far as there are these people who are motivated and committed.”

Following the implementation of a controversial mobilization law in May that established clearer regulations for territorial recruitment centers, Ukraine is reportedly drafting tens of thousands of fighters per month. Demand is highest in the infantry.

But there are logistical hurdles to train, equip and pay so many incoming people, and commanders constantly demand new soldiers. To ease that pressure, military leaders have had to take units from brigades in one region and transfer them to different areas to stabilize weak spots.

Some point the finger back at commanders who single out recent recruits for losses.

Viktor Kevliuk, a military expert with the Ukraine-based Center for Defense Strategies think tank, said the training offered to recruits is adequate. He said brigade commanders “are looking for an explanation for tactical failures.”

“Likewise, the brigade commander has the appropriate tools to influence morale. If all these processes are established in the brigade, there will be no significant problems. If these mechanisms fail, we read about the negativity in social networks,” he added.

And in intense fights such as the one in Pokrovsk, “it is the timely tactical decisions of commanders that make the difference, Kevliuk said.

In some instances, terrified new recruits have fled from the fight.

“This fear creates panic and chaos,” said the battalion commander in the 47th Brigade. “This is also the reason we have lost.”

The loss of the village of Prohres last month in the Pokrovsk region is the most recent example of territorial loss blamed on new recruits, commanders said. Units from the 31st Brigade left in a poorly coordinated frenzy, prompting the 47th Brigade to enter the battle and attempt to stabilize the line. A similar scenario unfolded in the village of Ocheretyne in May.

Not enough is done to train newcomers, the battalion commander said. “They don’t receive even the lowest standard of training required for our (combat) actions,” he said.

Ukraine’s sudden foray into Russia initially stirred hopes that the Kremlin might be forced to divide its military resources to respond. But so far, Russian forces have not wavered in their push toward Pokrovsk and other potential conquests.

Meanwhile, Ukraine’s lightning advance into Russian territory has slowed after two weeks, making only small gains, a possible sign that Moscow is counter-attacking more effectively.

Commanders in the east report that battles have only intensified since the incursion. Local authorities on Monday ordered Pokrovsk’s nearly 53,000 residents to evacuate within two weeks. In the neighboring town of Myrnohrad, even closer to Russian positions, residents were given only days.

The capture of Pokrovsk would undermine Ukrainian supply routes to the Donetsk region and ease Russia’s advance to the eastern cities of Sloviansk and Kostiantynivka. It would also mark Russia’s first major strategic win after months of painfully fought marginal gains.

In the last three months, the majority of Ukrainian territorial losses were recorded in the Pokrovsk area, according to three open-source monitoring groups, with fighting intensifying in the vicinity of the towns of Toretsk and Chasiv Yar. Russian forces dialed up the attacks in an attempt to capitalize on troop fatigue and shortages.

Is Putin's Inner Circle Wobbling?

The longer this goes on the more it will be in Russia's advantage, and they don't care about losing soldiers, whereas the Ukrainians do.

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
― Sun Tzu, The Art of War

“There is no instance of a nation benefitting from prolonged warfare.”
― Sun Tzu, The Art of War