Alexander Kolyandr

The secret behind Putin’s booming war economy

Russia’s spending on its war in Ukraine continues to grow. Somehow, despite tightening sanctions and increased global isolation, two-and-a-half-years in to the conflict, it appears Moscow can continue to splash the cash on its army – for now.

Spending on president Vladimir Putin’s military is set to increase by more than a quarter to 13.3 trillion roubles (£107 billion) next year, according to a draft of the Russian state budget for 2025 revealed this week. This colossal sum – which is nearly double the 6.4 trillion roubles (£52 billion) spent last year – is roughly twice the size of the amount spent by Britain on its own defence.

Russia’s government had planned to implement a steady reduction in defence bills across 2025 and 2026. This clearly hasn’t happened: the plan to shrink defence spending reflected the financial authorities’ desired fiscal prudence, rather than the Kremlin’s war plans or reality on the battlefield.

Written by
Alexander Kolyandr

Alexander Kolyandr is a researcher for the Centre for European Policy Analysis specialising in the Russian economy and politics. Previously he was a journalist for the Wall Street Journal and a banker for Credit Suisse. He was born in Kharkiv, Ukraine and lives in London.

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