Russia’s wartime economy is getting weaker as the war in Ukraine approaches its fourth anniversary, according to a recent report by PeaceRep, a research group led by the University of Edinburgh. The report, Against the Clock? Why Russia’s War Economy is Running Out of Time, finds that Russia is being forced to spend aggressively on the war, while its earning abilities have dropped significantly.
The funding source used to finance much of this spending, Russia’s sovereign wealth fund, also looks to be dwindling. According to the report, around 76% of the fund’s US$148 billion (£110 billion) pre-war liquid reserves was spent within the first three years of the war.
In an article in May, I argued that Russian leader Vladimir Putin could afford a drawn-out war because he had spent more than 20 years preparing for it. Under Putin’s leadership Russia has consistently posted budget surpluses, amassed foreign currency reserves and reduced its reliance on western debt.
