Vladimir Putin has been warned by his own officials that the war in Ukraine is becoming economically unsustainable, as spiralling defence costs threaten Russia's financial stability. Finance Minister Anton Siluanov has projected a budget overrun of at least $28bn this year, with further overspending expected in future years.
Proposed Spending Freeze
Siluanov has proposed freezing approximately $40.8bn in non-war-related expenditure to curb the deficit. He cautioned that Russia's financial reserves are not infinite and that current spending levels cannot be maintained indefinitely. The Kremlin has allocated two-fifths of the national budget to defence and security, yet analysts argue that apparent economic growth is illusory and the war effort is fundamentally unsustainable.
Impact of Ukrainian Strikes
Ukraine's intensified attacks on Russian energy infrastructure are exacerbating the economic strain. These strikes have affected a quarter of Russia's refining capacity, creating risks of fuel shortages and further undermining the economy. The combination of rising costs and infrastructure damage is placing unprecedented pressure on Putin's war machine.
Despite the Kremlin's public optimism, internal reports suggest that the war is draining resources at a rate that cannot be sustained. The finance ministry's warnings highlight a growing divide between military ambitions and economic reality.
