Russia’s wartime economy loses steam as oil revenues fall and the budget deficit grows

In cities and towns across Russia, life carries on. But beneath the surface, ordinary people are feeling the weight of an economy under strain after years of conflict and heavy military spending. About 30% of my money has simply started disappearing. I don’t even see it. I don’t even notice it. I go to the store once, buy something, and that’s it. The money’s gone. More than 3 years into the war in Ukraine, Russia’s economy is slowing. Government estimates suggest growth will be around 1% this year. And the Kremlin is turning to taxes on groceries to businesses to balance the budget. We need additional expenses on defense and security. Today, it’s the main task of our country. To ensure necessary resources, we will change the value added tax. It’s one of the most straightforward taxes for business. From January 2026, the value added tax will rise from 20% to 22% expected to add as much as 1 trillion Russian rubles. That’s more than 10 billion to the state budget. Also, smaller businesses will have to charge VAT with the threshold gradually dropping from 60 million to 10 million rubles by 2028. The change targets companies that split their operations to avoid paying VAT. The government also proposes higher taxes on alcohol, cigarettes, and vapes. Putin has enough money to maintain the current war effort and the current level of expenditures. After that uh he will well he need to make a tough choices trade-offs between uh maintaining military effort or for example um maintaining consumer abundance. With Western sanctions imposed and foreign borrowing blocked, the government leans on domestic credit, putting further pressure on already struggling households.

After two years of robust growth fueled by military spending on the war in Ukraine, Russia’s economy is slowing. Oil revenues are down, the budget deficit is up and defense spending has leveled off. The Kremlin needs money to keep its finances steady — and it’s clear where President Vladimir Putin intends to get it: at the cash register, from ordinary people and small businesses. Story by Charlotte Lam.
#Russia #war #economy

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33 comments

  2. Germany main example lost gas pipeline lost car manufacturing industry lost customer and last nail in dollar and euro trust for russian asset’s frozen

  3. I will agree that Russian economy is slowing down. But compared with UK, France and worst Germany (the "strongest" economy in Europe), Russia is doing pretty well, even with 20 packs of sanctions. I be much more worried about Europen economy than Russia, just saying.

  5. Russia will grow they just need to stop war, and make war happen in middle east.

    Europeans will only make Russia great again

    PS I don't support Russia, but I don't support war mongering state of West also.

  7. Whatever, Russian debt is only 20% of their GDP
    while france having 115%
    and Germany having 65%

    Now tell who is in trouble 😂😂😂

  12. These are the same western institutions that have been telling us for years, with so much conviction, emphasis on so much conviction (!), that Russia's collapse is imminent. Any dip in Russia's economic metric will have an avalanche of media hysteria to hype the narrative. It's getting really predictable how these media outlets work. 😅

  16. Putin will continue this war for at least another 12 – 18 months until he achieves his territorial goals,
    In the end Ukraine will be physically destroyed, Russia will be economically destroyed
    Both will be losers and it take each decades to recover

  22. Here we go again france 24 anti Russian propaganda.. how would france 24 know about the situation in Russia n fact is the economy in France is in a big mess same in England n Germany is not doing well since it lost access to cheap Russian oil n gas..

  23. Russia's main export is crude oil, and yet it imports diesel and gasoline. Now that Ukraine is allowed to use foreign missiles to strike crude oil infrastructure, that will also collapse. China will happily support Russia in exchange for moving its border north a bit.

  25. unless the people of Russia suffer greatly, there will be no change. Free Russia, get rid of Putin he’s taking you down with him.

  26. slowing even quicker than France and Germany economy ?? really ? please compare debt of Russia and debt of France

  27. We’re experiencing the same thing here in America and all we’re doing is blowing up drug boats “supposedly” 😢

  29. We have been hearing this for a long time. Now go to western countries. Come to Australia and ask people where their money disappear when they go to shops lol 😂

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