Russia’s Economy Is Slowing, Opening Fissures Over Policy

The wartime economy that Russia spurred into overdrive is slowing, causing tensions among the country’s economic elites as the war with Ukraine approaches its fourth year.

Many Russian civilian industries have stopped growing, and some had even gone into decline by October, according to the latest official data. The country’s currency, the ruble, dropped to its weakest level in two years last week, and businesses say they are struggling to get new loans or get paid by clients.

The central bank sharply raised the country’s benchmark interest rate in October to 21 percent, the highest since the end of the Soviet Union, in an attempt to dampen inflation.

Last month, the central bank also lowered its forecast for Russia’s economic growth next year to 0.5 to 1.5 percent, compared with 3.5 to 4 percent this year. The slowdown comes even as the government continues to pump record amounts of money into the economy to finance the war.

The combination of rising prices and falling economic activity has led some economists and officials to warn that the Russian economy is moving toward stagflation, a quagmire where prices rise quickly without growth.

Western nations have subjected Russia over the last three years to some of the strictest economic sanctions in modern history to punish President Vladimir V. Putin for his invasion of Ukraine.