Ukrainian attacks are making Russians fear the Kremlin ‘can’t protect them anymore’, according to an expert.
Military Outlays Outstrip All of Europe
The expanding reach of the war comes as the Russian economy faces severe strains. According to reporting from The Independent, the country’s military spending now consumes over 40 per cent of Kremlin expenditure. Driven by heavy wartime outlays, Russia spent $462bn on its military in 2024 when adjusted for purchasing power—outstripping the rest of Europe combined, as detailed in the International Institute for Strategic Studies’ latest Military Balance report.
Stagnation, Inflation, and Overheated Demand
While the Kremlin’s defense spending fueled gross domestic product growth that peaked at 5.4 per cent in early 2024, economic growth is projected to flatline. Central Bank chief Elvira Nabiullina warned the Russian parliament in November that the economy has reached the limits of its productive capacity while demand remains stimulated, pointing toward a dangerous combination of stagnation and inflation.
Soaring Prices and Everyday Consumer Strain
Ordinary citizens are absorbing the immediate impact of these macroeconomic pressures. Rampant inflation exceeds 9 per cent, accompanied by benchmark interest rates at 21 per cent. Staple goods have seen steep price hikes; last summer, the cost of eggs jumped by 42 per cent, bananas by 48 per cent, tomatoes by 39.5 per cent, and potatoes by 25 per cent. Utility companies also raised electricity prices by up to 250 per cent.
"Everyone drives Chinese cars these days, but there are no spare parts," Alexandra, 39, a former journalist who lives in Moscow and whose ex-husband is fighting in Ukraine, told The Independent. "The only foreign cars you buy are right-hand-drive. Anyone with a mortgage is paying crazy interest. People complain how expensive everything has become."
Sanctions, Shifting Trade, and Diplomatic Pressures
The Russian ruble has lost more than half its value since Putin first invaded Crimea in 2014, and Western nations have frozen over $600bn in foreign currency reserves. More than 1,000 Western businesses, including IKEA and McDonald’s, have exited the market, forcing imports of Western technology to route expensively through neighboring states like Kazakhstan and Georgia.
Despite Western sanctions and an EU price cap of $60 a barrel on Russian Urals crude—currently trading near $67—Moscow has sustained its war economy largely through record oil imports by India and China. Meanwhile, European allies are looking toward potential diplomatic developments. Donald Trump’s negotiators have opened direct talks with the Kremlin, and Mr Trump has warned of potential financial consequences if Putin rejects a ceasefire agreement.
