Kremlin’s War Economy Driving Recession in Russia’s Regions (Vadim Shtepa – The Jamestown Foundation)

Official economic data on the first six months of 2025 indicates that Russia’s war economy is stagnating as military industries absorb resources from civilian sectors. In the first half of 2025, 67 of Russia’s 89 regions reported severe budget deficits, with industrial hubs and resource-rich regions facing especially steep declines, highlighting the fragility of Russia’s economy. The Kremlin spent 8.5 trillion rubles (about $100 billion) on the military in the first six months of this year, while sanctions and falling profits from exports of natural resources erode Russia’s traditional income base.

Kremlin’s War Economy Driving Recession in Russia’s Regions – Jamestown