Mounting defence expenditure is widening Russia’s budget deficit and increasing strain across its wartime economy, as business and consumer sentiment weakens and economic growth slows.
Economists note, however, that these difficulties do not point to an immediate financial meltdown or economic collapse. High global oil prices linked to the Iran war continue to shore up essential export revenues, allowing the state to fund its four-and-a-half-year-old invasion of Ukraine – for now.
