Vladimir Putin has been warned by top finance officials and Russia's central bank that the cost of the war in Ukraine is unsustainable at the current pace. The warnings come as Ukraine continues to make frontline gains and strike deep inside Russia, targeting energy infrastructure.
Defence officials in Moscow reportedly told Putin they need billions of extra dollars this year to fund the conflict, according to Bloomberg News. Putin is said to have instructed the finance ministry to find savings elsewhere after it suggested spending cuts to avoid a widening budget deficit.
Finance Minister Anton Siluanov had anticipated Russia would run at least $28bn over budget in war spending this year, according to documents reviewed by the Financial Times. A letter from Siluanov in February urged the cabinet to freeze around $40.8bn in planned non-war-related spending. He also projected overspending of $54.8bn in 2027 and 2028.
Siluanov told Kommersant that the ministry is revising the budget to concentrate resources on priority areas, including defence and social obligations. He warned that reserves are not infinite and that further cuts may follow.
Analysts warn that Russia's economic growth is illusory, with civilian sectors suffering from high inflation, labour shortages, and rising taxes. The economy slowed to about 1% growth last year and shrank by 0.2% in the first quarter of 2026.
Ukrainian President Volodymyr Zelensky said Russian advances have slowed, while Ukraine has intensified strikes on Russian oil infrastructure, affecting a quarter of refining capacity and risking fuel shortages.
