Putin's record military spending: Is Russia's economy at risk of collapse?

Putin's record military spending: Is Russia's economy at risk of collapse?

Russian President Vladimir Putin is planning massive investments in the military and the war in Ukraine for 2025. According to current financial plans, military spending is expected to reach a new record, and about 40 percent of total government spending will go to defense and national security. However, this could have fatal consequences, as the Russian economy is already showing clear signs of weakness and is facing major challenges.

The forecasts call for defense spending of almost 13.5 trillion rubles, an increase of around 3 trillion rubles compared to last year. Economists warn that these investments would lead to cuts in other important areas, particularly social welfare. There is also a risk of rising inflation, which has already forced the Russian central bank to take action and raise the key interest rate. Analysts fear that inflation could rise to as much as 8.8 percent in 2025, which could further threaten Russia's economic stability.

The Russian economy's dependence on the Ukraine war could also mean that there is no end to the conflict in sight. Economists say the current war economy is the only thing averting a recession, raising questions about how long this strategy can be sustained, especially given tightened sanctions and falling revenues from the oil and gas sector. For a detailed analysis, see the report on www.fr.de.