Russia · Ukraine · Vladimir Putin · Financial Times · Israel · Fortune Technology
Russia warns war costs are ravaging its finances while Ukrainian ‘drone overmatch’ sends Putin’s forces reeling in new phase
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The Kremlin sounded the alarm on its deteriorating finances earlier this year, as its war on Ukraine pivoted dramatically against Russian forces.
Key facts
- The ministry also put war-related overspending at 4 trillion rubles in 2027 and 2028, while asking the cabinet to freeze trillions in non-defense outlays in the coming years
- Still, drones have been key as Kyiv has estimated that it has 1.3 strike drones on the frontline for every 1 Russian drone
- The deficit outlook has worsened so much that the finance ministry asked government agencies to cut non-essential spending by 10%
- In fact, for the first time since 2023, Ukraine is starting to regain more ground than it is losing, ISW said, seizing the initiative with new tactics and putting Russia on the back foot
Summary
According to a letter seen by the Financial Times, Russia’s finance ministry estimated in Feb. that spending on Vladimir Putin’s war was on pace to exceed its budget by at least 2 trillion rubles this year, or about $28 billion, with a more negative scenario putting that figure at 4 trillion rubles. The ministry also put war-related overspending at 4 trillion rubles in 2027 and 2028, while asking the cabinet to freeze trillions in non-defense outlays in the coming years. The projected explosion in war costs comes as Russia’s budget deficit was quickly diving deeper into negative territory. The deficit outlook has worsened so much that the finance ministry asked government agencies to cut non-essential spending by 10%.