{"id":2706,"date":"2026-07-03T04:42:25","date_gmt":"2026-07-03T04:42:25","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=2706"},"modified":"2026-07-03T04:42:25","modified_gmt":"2026-07-03T04:42:25","slug":"russias-economy-is-sputtering-and-putins-wartime-spending-model-has-pushed-the-country-to-an-economic-political-and-military-abyss","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=2706","title":{"rendered":"Russia\u2019s economy is \u2018sputtering,\u2019 and Putin\u2019s wartime spending model has pushed the country to an \u2018economic, political, and military abyss\u2019"},"content":{"rendered":"<div>\n<p>Putin has waved those figures at Western critics as proof that sanctions have failed to cripple Russia\u2019s booming wartime economy. China, one of Russia\u2019s few remaining major trading partners, has even studied Putin\u2019s model as a blueprint for sanctions-proofing its own economy, in the event Beijing\u2019s stance towards Taiwan turns aggressive enough to trigger Western penalties of its own. But Putin\u2019s success story is starting to show cracks.\u00a0<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=2704\">No holiday for New York City cops, who get a heat wave, World Cup and a Taylor Swift wedding at MSG<\/a><\/p>\n<p>Russia\u2019s economy has become dominated by the war effort, with the country\u2019s industrial and technological base increasingly dedicated to serving needs on the front lines. But now, with the Russian army running into a standstill in Ukraine and military costs mounting, Putin\u2019s economy stands at a crossroads, according to a research brief published Wednesday by the Center for Strategic and International Studies, a think tank in Washington D.C.\u00a0<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>Russia is still able to count on a vast pool of human labor and its \u201cshadow fleet\u201d array of oil tankers evading sanctions to bring in revenue from fuel sales, according to the researchers. But the costs of maintaining the status quo are mounting for Putin, as the wartime economy he built grows increasingly strained.<\/p>\n<p>\u201cEveryday Russians are suffering from a sputtering economy,\u201d the CSIS researchers wrote. \u201cRussia\u2019s economy is in distress, and Russia\u2019s wartime spending may be increasingly untenable. The moment is ripe for a pressure campaign that pushes the Russian economy toward exhaustion.\u201d<\/p>\n<p>The report first compiled the numbers detailing Russia\u2019s battlefield losses. Since the war began, as many as 450,000 Russians have died and 1.4 million have been injured, a pace of loss that now likely exceeds Russia\u2019s monthly recruitment, and has recently come with negligible benefits. After advancing deeper into Ukraine last year, Russian forces have moved at rates as slow as 50 to 90 meters a day in 2026, a pace that ranks among the slowest advancements of any war in the past century.\u00a0(During World War II, offensives such as the Soviet Union\u2019s incursion towards Leningrad or Kursk yielded advancements of several kilometers a day. During World War I, the Battle of the Somme fought in northern France\u2014often considered one of recent military history\u2019s deadliest conflicts\u2014saw offensives moving around 80 meters a day on average).<\/p>\n<p>Over the past few months, Russia\u2019s territorial holdings in Ukraine actually shrank for the first time since August 2024, according to CSIS. Another report, released in May by the Institute for the Study of War, determined Russia had lost control of 116 square kilometers in April alone, and that its military\u2019s rate of advancement had been shrinking since November 2025.\u00a0<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>Russia\u2019s military losses have mainly come down to Ukraine\u2019s improving abilities to strike deep behind front lines, as well as Russia\u2019s own faltering military machine, two factors with direct repercussions on the Russian economy at large.\u00a0<\/p>\n<p>Russia\u2019s war effort and its society have more or less relied on the same well of state cash in the past four years. GDP growth has largely come down to explosive state financing for Russia\u2019s manufacturing sector that has supported the military. Between 2022 and 2024, public cash injections exceeded 10%of GDP, according to a study published last year by the Institute of Economics and Peace, an Australian think tank. In addition to manufacturing and other sectors tied to defense, these funds have propped up demand through pensions and cash payments to soldiers and their families.\u00a0<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=2702\">Anthropic\u2019s Fable model is back. But U.S. AI policy is still a mess<\/a><\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>Analysts have termed Russia\u2019s strategy a form of \u201cmilitary Keynesianism,\u201d a reference to the famed economist\u2019s theory that emphasizes the role of governments stepping in to fix economic problems. In Russia\u2019s case, the state has intervened in a big way, and its answer to the problem of being a country at war and burdened by sanctions has been to invest massively in militarizing its economy and extending financial support to the hundreds of thousands of households impacted by the war.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>But after more than four years of war, that well is running dry. Russia\u2019s fiscal reserves are dwindling, and oil and gas revenues have cratered as many countries rerouted to alternative suppliers. An uptick earlier this year due to the conflict in the Middle East proved temporary, as oil prices have since normalized in part because of softening demand, while Russia\u2019s energy output in general has also declined due to more frequent Ukrainian drone strikes targeting oil and gas infrastructure.\u00a0<\/p>\n<div>\n<div><\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<p>A  published last year by Bruegel, a think tank in Belgium, estimated Russia\u2019s GDP growth to have plummeted to around 0.6% in 2025, after its economy expanded more than 4% in 2023 and 2024. Another study, by the Oxford Institute for Energy Studies, found that in 2025 the share of oil and gas receipts in Russia\u2019s federal budget revenue had fallen to 23%, the lowest percentage share in two decades. To make up the difference, Russia is likely turning to more expansive taxation policies, including a recent move to raise the country\u2019s value added tax from 20% to 22%, a decision that has not gone down well with most Russians.<\/p>\n<p>Neither the economic clouds or battlefield shortcomings have been enough to stop Putin and the Russian military. Just this week, Russia launched one of its largest attacks on civilian infrastructure in Ukraine yet, an 11-hour barrage of missiles and drones raining over Kiev that killed at least 20.\u00a0<\/p>\n<p>But with Putin\u2019s economy increasingly backed into a corner, the CSIS report argued the U.S. and Europe should seize the opportunity by expanding the West\u2019s sanctions regime, primarily by addressing the gaps that have allowed hundreds of chartered ships to sell unmarked Russian oil.\u00a0<\/p>\n<p>\u201cDespite Russia\u2019s battlefield challenges and economic vulnerabilities, the United States and Europe have failed to fully wield economic or military pressure,\u201d the authors wrote. \u201cWithout greater costs in blood and treasure, Putin is likely to keep fighting\u2014even as he pushes his country toward an economic, political, and military abyss.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=2700\">Best private student loans for medical school<\/a><\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Putin built an economy based on \u201cmilitary Keynesianism\u201d to survive the war in Ukraine. It\u2019s showing signs of fatigue.<\/p>\n","protected":false},"author":1,"featured_media":2705,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-2706","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-russia"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Russia\u2019s economy is \u2018sputtering,\u2019 and Putin\u2019s wartime spending model has pushed the country to an \u2018economic, political, and military abyss\u2019 - Cross Country Moving Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crosscountrymovingteams.com\/?p=2706\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Russia\u2019s economy is \u2018sputtering,\u2019 and Putin\u2019s wartime spending model has pushed the country to an \u2018economic, political, and military abyss\u2019 - Cross Country Moving Team\" \/>\n<meta property=\"og:description\" content=\"Putin built an economy based on \u201cmilitary Keynesianism\u201d to survive the war in Ukraine. 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