Bloomberg: War Costs Weigh Heavily on Russia's Economy, but Putin Shows No Intention to Cease Fighting

Bloomberg reports that the ongoing Ukraine-Russia conflict continues to escalate Russia’s fiscal burden, with its economic growth nearly stalling and budget deficits rapidly rising—signs of mounting economic side effects from the war are becoming increasingly evident. Senior Russian financial officials have already briefed Putin on the excessive costs of the war, yet the military continues to request massive additional defense funding.

Putin has responded indifferently to these economic challenges, opting instead to cut spending in civilian sectors to prioritize defense expenditures. Even as frontline offensives face setbacks, he remains committed to capturing the entire Donetsk region as a strategic objective. The Russian military headquarters still submits battlefield “victories” to him, while no members of his inner circle dare to advise scaling back operational goals.

The situation for Ukraine is gradually improving: hundreds of millions of euros in EU aid are about to be delivered, easing domestic fiscal pressure. Ukrainian forces routinely conduct air strikes deep into Russian territory targeting oil refineries and logistical hubs, aiming to undermine Russia’s key energy industry—the backbone of its war economy—and further increase Russia’s wartime costs, thereby intensifying the burden on Russian civilians. On the same day, Russia launched another large-scale missile attack on Ukraine.

Diplomatically, the Trump administration has shifted focus toward the Iran situation, effectively putting Ukraine-Russia mediation on hold. Meanwhile, European countries have yet to finalize their peace negotiation representatives. Both Western and European strategies continue to emphasize prolonged economic attrition, seeking to force Russia to adjust its military strategy through sustained economic exhaustion.

According to data from Reuters, Russia’s GDP is approximately $3 trillion, heavily reliant on resource exports. Economic growth has plummeted from 4.9% in 2024 to just 1% last year. The UK’s Telegraph estimates that Russia’s actual military expenditure exceeds the officially disclosed figures by over 65%.

Original article: toutiao.com/article/1866895288530956/

Disclaimer: This article reflects the personal views of the author(s).