Every since Russia fully invaded Ukraine I've been following media stories reporting on the Russian economy by citing western economist's and think tank's analyses. For the last three years it's been dominated by increasingly dire predictions and a sense of "they can't keep this up much longer." And this would raise my hopes that Russia would either collapse or Putin would be forced to negotiate seriously to stop the bleeding. Yet Putin somehow continues to keep finding ways to forestall collapse.<p>As a non-expert, non-economist I'm now quite jaded when reading analyses like this and pretty heavily discount them. That's because I've had to conclude two things: First, the Russian economy is even more opaque to western analysts than the analysts already admit it is. And second, Putin's absolute dictatorial power and ability to have anyone who complains much thrown out a high window, provides myriad levers to continue kicking the can down the road. While I'm sure doing so will eventually result in serious costs and consequences, Putin only cares about getting control of most of Ukraine (either directly or by political proxy). He figures after that Russia can nurse its deep wounds and pay the piper slowly over a decade or more. He may be wrong, but I think that's his calculus.<p>I think the only pragmatic course is to discount these analyses and operate as though Putin can continue to survive economically as long as he needs to (and then hope we're wrong and pleasantly surprised).
As the war in Ukraine drags on into its third year, Russia finds itself at a critical economic crossroads. The Kremlin’s war chest is rapidly depleting, and sanctions are tightening the noose around key revenue streams. With the National Wealth Fund almost exhausted and budget deficits ballooning, Russia’s ability to sustain the current pace of war spending into 2025 looks increasingly dubious. While state-controlled media touts the narrative of resilience, the numbers tell a far grimmer story.