Putin's war budget is bursting at the seams amid renewed peace talks - Bloomberg
Kyiv • UNN
The Russian economy is entering 2026 in a state of critical overstrain, forcing the Kremlin to plan cuts in military spending. This comes amid renewed diplomatic contacts mediated by the United States.
The Russian economy is entering 2026 in a state of critical overstrain, forcing the Kremlin to plan a reduction in military spending for the first time in four years of full-scale invasion. Against the backdrop of renewed diplomatic contacts mediated by the United States, Bloomberg analysts note that financial exhaustion is becoming the main factor that could push Vladimir Putin to real concessions in the negotiation process. UNN writes about this.
Details
According to Bloomberg, in 2026, Russia plans to cut defense spending by approximately 11% compared to the previous year. This is a forced step, caused by a drop in revenue from energy exports and a rapid increase in the cost of servicing domestic debt.
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The aggressor's economy faced a liquidity deficit, and the costs of military payments and equipment production became an unbearable burden for the budget, which has been in a deep deficit for the fourth year.
We are seeing the first signs that Russia's war machine is hitting an economic ceiling
The situation is exacerbated by the fact that credit servicing costs in 2026 will exceed the combined expenditures on education and medicine, which creates a risk of social unrest within the country.
Peace Plans and Washington's Pressure
The Trump administration is actively using Russia's economic vulnerability as leverage. Washington believes that increased sanctions against Chinese companies assisting Russia, coupled with low Urals oil prices, will deprive Putin of the ability to continue a high-intensity war in 2027. This creates a narrow "window of opportunity" to reach agreements on terms acceptable to Ukraine and its allies.