It’s the Economy, Putin. The rising cost of the war in Ukraine “is unsustainable”

Vladimir Putin has been warned that he cannot afford to continue his war in Ukraine at its current pace, while Kiev continues to score victories on the front line and devastate energy infrastructure deep within Russia.

Senior finance officials and the Russian central bank have reportedly urged the Kremlin to halt escalating defense spending at a time when both parties are stepping up costly airstrikes against vital infrastructure.

Following the attack on cities across Ukraine overnight on Monday, which killed at least 22 people, the Ukrainian Foreign Minister, Andrii Sybihastated that Moscow is “losing on the battlefield” and “There are no cards to play other than terror“.

At a time when Kiev is keeping up the pressure with attacks on Russian energy infrastructure, defense officials in Moscow reportedly told Putin that will need billions more dollars this year to finance the conflict, notes .

Putin reportedly told the Finance Ministry to find savings in other areas, after he suggested that expenses would have to be cut to prevent a growing budget deficit from becoming unmanageable.

It was learned last week that the Minister of Finance, Anton Siluanovhad anticipated that Russia would spend at least minus 28 billion dollars (around 24 billion euros) above the expected budget to war this year, according to documents analyzed by the .

A letter from Siluanov in February reportedly urged the government to freeze around $40.8 billion in planned spending non-war related this year. He also predicted that Russia would spend an additional $54.8 billion over budget on the conflict in 2027 and 2028.

Siluanov told Russian newspaper Kommersant last week that the finance ministry was review the budget to take into account “changing macroeconomic conditions and the need to focus additional resources on key priority areas.”

“Of course there is absolute priority expenditure items: fulfilling social obligations and guaranteeing the country’s defense and security”, he said. “Furthermore, we analyze each item according to the economic return, the achievement of results and, ultimately, its impact on people’s well-being”.

Siluanov suggested that More cuts may follow: “The reserves are not infinite. We cannot afford any financial slack in the face of global transformations of such magnitude. No one will give us a break.”

Nearly 2/5 of the budget was reserved for defense and security this year as the conflict continues. Strong investment in industry and equipment acquisition supported the Russian economy in recent yearsbut analysts warn that the appearance of economic growth is illusory and that decoupling from a war economy will bring more challenges.

Sources told Bloomberg that the Russian Defense Ministry and the Kremlin have opposed defense cuts that harmed companies dependent on lucrative military contracts.

Nigel Gould-Davies, senior researcher for Russia and Eurasia at the International Institute for Strategic Studies, warned last month that, on the current course, war “is expected to prove economically unsustainable”.

“The Kremlin will soon face a fundamental choice: either radically increase its demands on the Russian economy and society, or reduce its war objectives”, he stated, at a time when civilian sectors outside the war are dealing with the inflated cost of capital, labor and goods, as well as rising taxes.

The Russian economy, which is worth 3 billion dollars and is dependent on raw materials, slowed sharply to growth of about 1% last year, compared with 4.9% in 2024, and contracted 0.2% in the first quarter of 2026, which officials attributed to high interest ratesWestern sanctions and a strong ruble.

The growth of the Russian economy is expected to be modest 0.4% this year, says .