Russia's economy is unstable and will limit its ability to fight against Ukraine - ISW
Kyiv • UNN
ISW reports a critical reduction in Russia's financial reserves due to the war against Ukraine. Expenditures have exceeded $200 billion, and corruption in the country has increased by 30%.
Russia is losing its ability to effectively support the defense sector while maintaining economic stability. This is due to rising war costs, corruption, labor shortages and other factors. This is reported by UNN with reference to the report of the American Institute for the Study of War (ISW).
Details
Before drawing conclusions, analysts gave for understanding the information of recent days regarding Russian finances.
In particular, on December 7, US Secretary of Defense Lloyd said that Russia has spent more than 2 200 billion on the war against Ukraine and has suffered at least 700 thousand losses since February 2022. At the same time, recent expenditures amounted to a total of 1,000 soldiers per day.
On Monday, December 9, the Ukrainian Center for Countering Disinformation reported that Russia's liquid assets in its National Welfare Fund decreased from 1 140 billion in February 2022 to 5 53.8 billion by December 1, 2024. The Center noted that Russia is increasingly relying on Chinese yuan reserves and gold sales to cover its budget deficit, and allocates a third of its national budget for 2025-2027 to defense spending, indicating the unsustainable priority of war to the detriment of economic stability.
Russia continues to face the staggering costs required to support its war effort against Ukraine, with growing economic tensions, labor shortages, and systemic corruption threatening the sustainability of the Russian defense industry base (OPB).
Russian Prosecutor General Igor Krasnov also said on December 9 that corruption crimes, including bribery, increased by almost 30% in 2024 compared to 2023. At the same time, the Russian authorities brought to disciplinary responsibility more than 30 thousand Russian officials for corruption violations in 2024.
ISW output
Analysts believe that the growing economic pressure on Russia caused by the war, combined with widespread corruption, labor shortages and the inefficiency of the Russian defense industry, is likely to increase the cost of war for Russia and further undermine its ability to effectively support the defense sector while maintaining economic stability.
recall
Experts of the International Monetary Fund (IMF) have updated the basic forecast for the duration of Russia's war against Ukraine – the war, according to their scenario, may last until the end of 2025
