The Duran Podcast - EU isolated. Russis big deals with India, China, Saudi Arabia

Episode Date: December 6, 2025

EU isolated. Russis big deals with India, China, Saudi Arabia

All right, Alexander, it's been a while since we've done a video on the Russian economy. So let's talk about what is happening with the Russian economy. We have big meetings with India that are taking place. We had a meeting with China between the Russian foreign ministry and the Chinese foreign ministry as well. And we also have Putin saying a couple of days ago, he said that his goal is to really ramp things up with with bricks and with China and with India as far as trade and cooperation goes. I mean, that was what Putin said. He really wants to crank things up, the cooperation, the economic trade between these two

BRICs countries and between all the BRICs members, but he singled out China and India. So what is the state of the Russian economy and how do you see a Russian trade going forward with these countries? Right. Well, let's start with the Russian economy because, again, there's been enormous impact. of commentary about this in the West, pretty much all of it wrong. And you have to go back to programs we've been doing about it since the summer. We pointed out then that because of the over, the very fast expansion that the Russian economy achieved last year and the year before,

the economy was overheating. That caused inflation to rise. The central bank decided to put the foot on the break, to slow the economy down as far as possible in order to bring inflation down. We've done programs explaining the central bank's interest rate policy and why interest rates went up so high. And we also explained the fact that the central bank's actions have the full backing of Vladimir Putin. He made a decision whether central bank, that he preferred lower inflation, even if that meant low to zero growth this year. And by the way, if you are familiar with economic policy, as it used to be conducted in the West, that is exactly how it used to be conducted in the West itself.

So to give an example, in the 1940s, economic growth in the United States was very much. very high. There had already been very high economic growth during the Second World War. The economy at that point, during the war, had been growing at a rate of 15% a year. That led to around 20% inflation. In the early 1950s, the Treasury and the Fed agreed that this had gone too far. The economy needed to be slowed down. Growth fell sharply to below two percent. a year, but inflation was brought under control. So that's exactly what the central bank and the government Vladimir Putin did this year. I've done this year. So inflation peaked at perhaps 10 or 11 percent on an annualized basis. In March, interest rates were brought up very high, over 21 percent at one

point. They've been reduced since then. Inflation has been steadily falling. It is now expected to be below 6% for the year as a whole by the end of this year, which means it is almost certainly below the 4% target, which is the constant 4% target. The problem with inflation in the economy has been solved. The economy has avoided recession. And this is the other thing that's the story of this year. Unemployment continues to be very low, 2.2%, which is basically full employment, because when you're talking about 2.2% inflation, that's people who are choosing not to be employed.

And people make these choices, and often they are rational choices. One shouldn't be critical of it. And the result is we're probably likely to get growth of just, under 1%, but it's likely that from this point on, interest rates will be reduced. And it's likely that from about the summer of 2026, we're going to see growth in the economy begin to resume, though not at quite the same frenetic levels that we were seeing in the previous two years. So that is the overall state and situation with the economy.

There is the other story, which is the one that the West loves, which is the idea that Russia's going to run out of money, that the budget deficit is going to widen to impossible levels, that we're going to choke off Russia's oil exports, and that's going to deprive Russia, the money that it needs to cover its budget, all of that. Now, no part of that narrative is true. Russia's budget deficit this year is going to be higher than normal. It's going to be 2.6% of GDP, which by Western standards is low, on the low side. The reason that has happened is precisely because the economy has been slowed, which has reduced the flow of tax receipts. Tax receipts from the economy would have been higher if growth had been higher. As growth returns, the deficit will fall and quite plausibly will disappear. It is also true that because there's an oil glut, oil prices have been low this year.

And that has impacted, obviously, on the budget. But the Russian government has now produced budget figures. They confirmed the point that we've been making in program after program, that people overestimate the importance of oil revenues, of oil and gas revenues to the budget anyway. We said that oil and gas revenues account for perhaps 25% of the budget, not 30% or 50%, as some people say, it's been reducing anyway.

And what people always overlook is that around half of those revenues anyway are accounted for by domestic sales of oil and gas on the domestic Russian market. Now, Russia is not going to stop exporting oil and gas anyway. Oil and gas exports to China continue. mostly they're now conducted by pipeline.

There's an oil pipeline to China. There's a gas pipeline to China. That is continuing undiminished. And we've anyway now said some more information about the overall levels of Russian oil exports. And these have come from the financial media in the West. Oil exports, despite the luke oil and Rosneft sanctions, have been barely affected.

The Russians have simply rerouted oil exports through non-sanctioned companies. So oil exports are largely at the same level as they were before the sanctions. And in India, the Financial Times admitted that India continues to buy Russian oil. They admitted it in an article yesterday and the main, the refiner that everybody's been hearing about,

reliance has reduced its imports of Russian oil, or so it says, remember oil from Kazakhstan can really be in Russian. You can play all kinds of games there. But in the meantime, other refiners have been picking up the slack. And as I said, there's been little change overall. So there it is. That's the situation. The budget is stable.

the economy overall is stable. Inflation is falling. All of these narratives that we hear of an economy that's running out of steam, that's about to break down, that's going to run out of money in February, none of that has any connection to reality. There are always problems in every economy. There are some industries that are doing better, some industries that are doing less well. There was a good harvest this year, by the way. So the agricultural part of the economy is doing well. PMI in services is now well over 50 again, which points to further expansion. But it would be wrong to say that there are no problems. There are always problems. But those problems which do exist are manageable and the economy overall this state. I believe even Bessent admitted that the Russian economy is doing better, that the sanctions

are not working as intended. Yes. Yes. That's a pretty big admission from him. It's a very big admission coming from him. But that is the reality. This is too big an economy. It is also, in terms of resources, a self-sufficient economy, but it does have strong trading

partners, and this is where what you said about Ricks and what Putin is saying about Bricks comes in, it's not going to be choked off by Western sanctions. You know, we've had 19 sanctions packages from the EU. The idea that the 20th one is going to be the one that's going to be the silver bullet that's going to kill this economy by now is ridiculous. And people should bury that idea completely. Well, they're moving forward with the 20th, Yes, Alexander.

So since we're on the topic of sanctions and the EU, you have the 20th sanctions package, which they're putting together. We had news out of Europe that they're going to cut off Russian oil and gas, Russian energy by 2027, I believe is the goal, but 2026, they're basically going to tell all the EU member states enough. Start phasing it out. You have one year, and there's going to be no more Russian energy in the European Union whatsoever. And they also passed some more regulations against banks with banking with Russian-connected individuals or companies.

Part of the money laundering, anti-fraud of the banks. More regulations for banks not to deal with Russia, basically. deal with Russia or Russian banks or Russian companies. So, you know, the EU is not understanding that none of this stuff is working. This stuff actually backfires on the European Union, but they press ahead with all of these things. Absolutely. Now, can I just say a few things about the energy sanctions? Because as I understand it, Hungary and Slovakia did not agree to them. them. So it looks as if whatever veto Hungary and Slovakia have, in theory, is not being applied in practice because the European Commission and the EU overall are going full steam ahead

in this. Hungary, of course, got sanctions relief on its imports of oil and gas from the United States because Hungary used to get its oil, for example, from luke oil. And all by had a meeting with Trump, and Trump gave Hungary at least a year's sanctions relief, but Ursula, the Commission, paying no attention to any of that. They're just imposing their position. And it really is astonishing. And one wonders whether this is even legal, but, well, legality and this commission have parted company long ago about all of the other sanctions that they're taking.

attempts to restrict financing. Russia has just completed deals with China, visa-free travel for Russian citizens to China, Chinese citizens to Russia. It is doing an identical deal with Saudi Arabia. Apparently the UAE is now starting to accept meerkards, as is, by the way, I understand, is Egypt. More and more countries are telling the... EU shove off. We're just going to go ahead. We're going to do these deals. You dare sanctions us if you want, but is the EU really going to sanction Saudi Arabia? And bear in mind, if you have a visa-free arrangements between Russia and a country like Saudi Arabia, if Russians want to go to Saudi Arabia, they're going to bring their mere cards with them. So where there are,

where there's visa-free access, it means that the mere card goes. So that's the reality. And it's the EU that is marginalising itself because nobody seriously believes that the EU is going to start imposing sanctions on Saudi financial institutions, Saudi banks, Saudi companies, and those kind of things. A big defeat for Trump, where he was telling the media just a couple of weeks ago that India is ditching Russia? Well, yes, I think so. Because Putin is now flying to India.

This trip to India is receiving huge amounts of attention in the Indian media. The word is that there's going to be major economic packages. Word is that there's going to be major arms packages as well. Arrangements for India to rejoin the Suhoi 57, 5th generation fighter jet program. India, by the way, was originally part of that program. Then it pulled out. The Russians went forward with it alone. They completed it.

They brought it into service. India now wants to rejoin. And of course, the point is, for India. The attraction is for India. India needs fifth generation fighters. The Russians have always shown that they're willing to agree to technology transfer deals with India, which the United States, for example, is not. And they're prepared to localize production of the Suhoi 57 in India. So India can build it itself in India using Russian engines and the engines can also be built in India. And India can also develop its own electronics and install its own electronics in these aircraft.

Now, the Russians and the Indians have a long history of doing deals like this. Way back in the early 60s, the then-Sovieter Nikita Khrushchev and the then-Indian prime Minister, Bandit Nero, a deal, a similar kind of deal, which resulted in India being able to produce MiG-21 fighter jets in India. And we're going to get something on a much bigger scale this time. S-400 missiles, air defence missiles also supplied to India, likely warships supplied to India. But the major story of Indian. Russian relations is of an enormous increase in mutual trade.

Mutual trade between India and Russia basically stopped after the Soviet Union collapsed. Now it's coming back on a huge scale. It was originally driven by oil exports, but it's now diversifying with more and more Indian businesses becoming interested in participating in the Russian market. And there are stories, there are reports that India is also suggesting to Russia that Indians might want to go to Russia to work there as guest workers, not as immigrants, but as guest workers filling gaps in the Russian economy. Russia needs 12 million extra workers by 2030. And India is suggesting. to some of them at least might come from India.

All right, we will end the video there, the durand.locals.com. We are on X, Rumble, and Telegram, and we are also on Substack as well. So check us out on Substack. And go to the Duran shop, pick up some merch. There are links in the description box down below. Take care.