Recent reports indicate that the Russian economy is facing a serious crisis, gradually descending deeper into trouble. According to The Bell and the Financial Times, the Kremlin and President Vladimir Putin have growing difficulties explaining the ongoing war to their closest circle of oligarchs.
Putin is convening major industrialists and oligarchs, urging them not just to buy federal bonds but to contribute directly to financing the war effort, with each expected to provide over a billion dollars. This points to growing deficits and dwindling state resources.
At the same time, Ukrainian drone, missile, and ballistic technology proves highly effective in the country's defense, causing significant losses to the Russian economy. Around 40-50% of Russian exports are currently blocked due to sanctions, logistical costs, and attacks on critical infrastructure. This heavily impacts Russia's oil and gas income.
Increased extraction taxes and administrative measures fail to fully compensate for economic losses. Consequently, the Kremlin is compelling the wealthiest to fund the war directly, presenting this as a "duty to the state."
The situation in Russia is deteriorating: large portions of the budget are allocated to law enforcement, while only a fraction of the deficit is covered. Meanwhile, public discontent is rising, alcohol consumption is increasing, and living standards are dropping.
Ukraine continues to respond effectively through technological advancements and international partnerships. Defensive innovations further weaken Russia's capabilities. Experts assess that Russia's economic situation will worsen, affecting its ability to sustain war spending.
