Russia’s War Spending: Kremlin Faces Tough Choices Amid Losses & Economic Strain
Russia’s War Economy Shows Resilience, Despite Losses and Slowing Growth
Despite substantial losses and a slowing economy, the Kremlin continues to spend heavily on defense, raising concerns about the potential for a prolonged conflict in Ukraine and increased threats to Europe. Russia is expected to be able to continue its invasion of Ukraine throughout 2026, despite growing economic pressure and a manpower shortage.
Bastian Giegerich, Director-General of the International Institute for Strategic Studies (IISS), stated that “little indicates” a decline in Russia’s ability to wage war against Ukraine for a fifth consecutive year. According to analysts, the Kremlin spent at least $186 billion on defense in 2025, representing 7.3% of the country’s GDP – more than double the proportion of spending by the United States, .
Defense finance expert Fenella McGerty noted that while the Russian economy is slowing, which could lead to a “potential reduction” in real military spending in 2026, this comes after a sharp increase in previous years. Military spending has doubled in real terms since 2021, allowing Russia to actively invest in equipment and the recruitment of contract soldiers.
Challenges with Mobilization and Personnel Quality
Nigel Gould-Davies, a Russia expert, noted “growing signs that the pace of recruitment in the Russian Federation has begun to lag behind monthly losses.” This could present the Kremlin with a “moment of truth”: either reduce the pace of the offensive or announce a second wave of compulsory mobilization, risking social protests.
Estimates suggest Russia is recruiting between 30,000 and 35,000 people per month, but the quality of personnel is declining – recruiters are increasingly turning to individuals with dependencies and physical health problems.
Threat to Europe
Moscow is using the war to modernize its weaponry, including Shahed-136 drones capable of striking targets across Europe at a range of up to 2,000 km. Giegerich emphasized the need to strengthen NATO’s air defenses, recalling the incident in September of last year when 21 Russian drones violated Polish airspace, paralyzing airport operations.
European allies in NATO have pledged to increase defense budgets to 3.5% of GDP by 2035 under pressure from the Trump administration, which is demanding that Europe take responsibility for its own security. However, experts warn that it will take Europe until the mid-2030s to break away from military dependence on the United States (in intelligence and space assets).
Other News About the War in Ukraine
Earlier, it was reported that the Kremlin made a statement on the occasion of the fourth anniversary of the war, calling the occupation of parts of Ukrainian territory “ensuring the safety of people who lived and live in eastern Ukraine.”
Bloomberg, meanwhile, reports that it will be difficult for Russia to launch a major offensive in the coming months. Russia is currently able to mobilize between 30,000 and 35,000 people each month. However, these numbers do not offset actual losses on the battlefield.