Economic growth has stalled, investment remains weak and consumer demand is slowing. Fiscal pressures are intensifying as revenues decline and expenditure, particularly defence spending, continues to rise. Even where commodity revenues provide temporary relief, they do not address the deeper structural imbalances of a war-driven economic model that is approaching its limits.
This creates a dangerous feedback loop. As the civilian economy weakens, the Kremlin relies more heavily on defence spending and state procurement to sustain output, employment and political control. The greater this reliance becomes, the harder it is for Russia to disengage from the war without triggering internal economic and political costs.
Russia’s Militarised Economy and the Destabilising Effects on Regional Security: UK Statement to the OSCE
UK Senior Military Advisor, Colonel Joby Rimmer warns that Russia’s selective ceasefires mask bad faith engagement, a war dependent economy, and growing militarisation, making Moscow more coercive and risk tolerant. Russia’s actions, not its rhetoric, demonstrate the absence of any genuine...
I think it summarises Russia's economic and financial problems rather well. Putin has been leading and continues to lead the Russian economy inexorably downwards.
In my opinion Putin should have abandoned the attack once it became clear that
(a) the Russian army was not the irresistable force it had been believed to be
(b) unlike with Crimea in 2014, the west was going to react seriously to the invasion
I think that invading Ukraine will be remembered as a miscalculation on Putin's part but his decision to enter into an extended war will be remembered as a monumental miscalculation.