Av Anton Gerashchenko på X:
Since the start of the full-scale invasion, Russia has been increasing its war spending every year. In the 2026 budget, the Kremlin plans to spend 12.93 trillion rubles ($163,4 billion) (almost 30%, a record since the Soviet era) on the war, the army, and weapons purchases.
This rapid growth in spending is happening without an adequate revenue base.
The Russian economy has rested on three main pillars: energy exports, gold and foreign exchange reserves, and the National Wealth Fund.

Oil and gas revenues account for about 25% of Russia's budget and are the main source of funding for the war against Ukraine.
As of mid-December, prices for Russian Urals crude are at their lowest level since the start of the full-scale war, at just over $40 per barrel. In February 2022, Urals prices were in the range of $80-90 per barrel.

Russia's National Wealth Fund is rapidly losing liquid assets: from $113.5 billion in 2022 to $51.6 billion in 2025. It was used to finance the budget deficit, especially in 2022-2024.

Gold and foreign exchange reserves - at the end of November, according to Ukraine's Foreign Intelligence Service, in order to quickly patch up holes in the budget and support the ruble exchange rate, Russia's Central Bank began selling strategic gold reserves. The sale is taking place on the domestic market. Access to foreign markets is blocked by sanctions.
In fact, Russia is "eating through" reserves that for decades were considered untouchable.

Even the Russian media are now openly writing about the possibility of the Russian economy entering a phase of stagnation. According to experts, the 1% GDP growth projected by the economic development ministry for 2025 will most likely not be achieved.
Declines in industrial output have been recorded across all civilian sectors of the Russian economy. According to the latest data, there has even been a decline in production in the military sector, despite government contracts and financial backing from the budget.

Due to sanctions restrictions, declining international trust, and high risks, Russia has extremely limited access to external loans.
There is little reason to expect a rise in energy prices. Therefore, social programs are being cut, payments to contract soldiers are being reduced, and further emissions and tax increases are being implemented.

From January 1, 2026, the VAT rate will increase from 20% to 22% - the highest level in Russia since 1992.

A radical tax reform for small businesses has been approved, affecting not only hundreds of thousands of entrepreneurs but also millions of their customers.

A law introducing a "technology levy" has been signed - a tax on equipment and electronics sold in Russian stores.
However, even the usually reserved head of the Central Bank, Elvira Nabiullina, speaks bluntly - due to tariff and VAT increases in early 2026, the Russian economy will experience an acceleration of inflation.
"In December, certain companies have already begun adjusting prices with this in mind, but the main impact is yet to come," she said.
For now, the Kremlin is doing everything it can to sustain military spending, which it considers a priority. But the Russian economy may not be able to withstand the continuation of the hot phase of the war.
Especially if sanctions are tightened further.