#ukrainewar #ukrainewarupdate #military #militarydevelopments #militarystrategy
Russia’s war budget is hitting hard limits. Finance‑ministry data show a Jan–Jul deficit of 4.9T rubles ($61B) as spending jumped ~20% while revenues barely grew; defense rises to ~6.3% of GDP and ~32% of the 2025 budget, crowding out civilians. At the same time, energy revenues fell double‑digits year‑on‑year in summer, and Brent hovered near $66 in mid‑August—shrinking the tax take in ruble terms. With EU/G7 immobilizing roughly $300B of Russian sovereign reserves (≈€210B in the EU) and routing the profits to Kyiv, Moscow loses FX optionality while domestic rates stay high, raising financing costs. Net: the state is forced to ration—prioritizing the front over the home front—while logistics losses and sanctions tighten margins. This isn’t a sudden crash; it’s a controlled freefall: deficits widen, buffers thin, and every month gets pricier. The question now isn’t if austerity lands somewhere—it’s where and when.
📚 Sources
• Vedomosti — Russia’s Jan–Jul 2025 federal deficit ~4.9T rubles (MinFin data)
https://www.vedomosti.ru/economics/articles/2025/08/14/1070301-defitsit-byudzheta-za-yanvar-iyul-sostavil-49-trln-rublei
• Reuters — Russia’s H1/2025 budget: spending +20.2%, revenues +2.8%; defense ≈6.3% GDP and ≈32% of 2025 budget; energy revenues fell YoY in June
https://www.reuters.com/world/europe/russias-budget-data-show-strong-state-spending-in-first-half-2025-07-07/
• Reuters — Oil near $66 in mid‑Aug 2025
https://www.reuters.com/markets/commodities/oil-falls-third-day-supply-worries-grow-2025-08-12/
• Reuters — EU exploring use of profits from ~€260B immobilised Russian sovereign assets beyond 2025
https://www.reuters.com/world/europe/eu-explores-ways-use-profits-russias-immobilised-assets-beyond-2025-2025-08-08/
• Reuters — Within EU alone, about €210B in Russian central‑bank assets are immobilised; proceeds already funding Ukraine support (example: Finland ammo package)
https://www.reuters.com/business/aerospace-defense/finland-use-proceeds-frozen-russian-assets-supply-ammunition-ukraine-2025-05-19/
• Reuters — BoR policy rate was lifted to very high levels in early 2025 (tight financing conditions)
https://www.reuters.com/world/europe/phone-call-between-trump-putin-possible-friday-tass-says-2025-02-14/
