Russian Presidential Election: Putin Moves Towards His Fifth Term in Kremlin

Russia will choose its president on March 15-17. Voting process in the country has started as of today (March 15), and would continue until March 17, though early and postal voting has already begun, including in occupied parts of Ukraine. (Note: The Ukrainian Foreign Ministry said on March 14 that Russia's staging of elections in occupied territories of Ukraine (Donetsk, Luhansk, Zaporizhzhia and Kherson regions, as well as Crimea) is illegal and void, and this is another demonstration of Moscow's continued disregard for international law norms and principles).

The latest opinion polls by the Levada center, which is a non-governmental polling organization, demonstrate that Putin remains the strongest candidate as 86% of Russians stated that they approve Putin’s actions and only 11% said they didn't, which marks the highest approval rating since Russia's annexation of Crimea in 2014.

Despite Russia continues to experience macroeconomic problems such as high inflation, weakening currency, and a tight labour market, it appears the economic issues will not have a major impact over the elections. (Note: According to the Levada Center, increased inflation and rising food prices have a lasting impact on the mood of Russians, with the proportion of Russians cutting back on spending increasing).

On the basis of the results of various polls, we think that Putin will win the election with a huge margin. We attach 99% probability that Putin will have his fifth term in Kremlin until 2030, and could continue his tenure until 2036. The second possibility (with 1% probability) that no candidates receive more than half the votes on March 15-17, and the country will have a second round taking place on April 7.

-          (99%) Putin wins: In this scenario, Putin would pursue similar economic and political policies. Putin would continue to manage the economy similar to his previous term, and military spending would be further increased to fund the war in Ukraine. The budget will continue to be under the pressure due to ongoing sanctions, fall in export revenues, and government expenditures including war spending and social benefit payments.

-           (1%) No candidates receive more that 50% of the votes: There's a very small chance there will be a second round on April 7. We deem it highly unlikely that other candidates will secure more votes than Putin if there will be a second round.

(Note: There's an extremely small chance the Putin will be defeated by another candidate in the first round, but we deem it highly unlikely (Less than 1% chance).

The other three candidates in the race include Nikolay Kharitonov representing the Communist Party, who has not gained as much as a fifth of the vote share since Putin’s first presidential election. Two other Duma politicians, Slutsky and Davankov, are also running and they are considered to be pro-Kremlin. According to various pools like CIPKR and VCIOM, Slutsky and Davankov will receive around 3%-5% of the votes. There are no candidates who clearly oppose the war in Ukraine. (Note: Boris Nadezhdin, who previously announced he is against the war, was barred from standing by the Central Election Commission (CEC) on February 8 after CEC asserted that he had not received enough legitimate signatures nominating his candidacy).

It is worth mentioning that the key figure for the opposition in Russia, Alexey Navalny's death on February 16 after three years in detention, deprived Russia’s opposition of its strong figure before the election. The incident was heavily questioned and criticized in Russia.

As mentioned above, we think Putin will win the election. After Putin will be reelected, we foresee he will not accept restoring Ukraine’s borders willingly, and wait for the possibility of a Trump win in the U.S. elections as Putin hopes Trump is reelected U.S. president and splits western support and leading to a Russia friendly peace deal with current territories. We think the second round would be a big surprise; and another candidate other than Putin winning the election in the first round is highly unlikely. We see no political volatility during and/or after the elections.