The Russian public is shouldering an even higher cost for Vladimir Putin’s war in Ukraine than previously anticipated, with inflation soaring and the country’s defence spending set to rise even further in 2025, according to the UK Ministry of Defence (MoD).
More than three years since Russia launched its invasion, the financial strain on ordinary Russians is becoming increasingly evident. Inflation is expected to exceed the target set by the Russian Central Bank, with the MoD predicting that Russia will likely spend more on its military than budgeted for in the coming year.
In its latest update, the MoD highlighted that inflation is anticipated to surpass the 4% target for 2024, already exceeding the 7.9% forecast for last year. This comes despite the Central Bank’s drastic increase in interest rates, which shot up to 21% in January 2024, a significant rise from 7.5% just six months earlier.
With interest rates climbing to these levels, borrowing costs have become significantly higher, putting further pressure on Russia’s economy. The MoD noted that the actual rate of inflation in Russia could be even higher than officially reported, adding to the strain on both the public and businesses.
As civilian industries face mounting financial pressures, the Russian government is likely to become more reliant on its military industrial complex to fuel economic activity. The MoD warned that a wave of corporate defaults in non-military sectors was highly probable if the economic situation worsens.
Despite these financial setbacks, Putin’s military campaign in Ukraine shows little sign of slowing. While inflation and economic hardship continue to hit home for Russians, the president remains determined to pursue his territorial ambitions. A divided West, with cracks emerging between the US and Europe, has given Putin new hope in his war effort.
US President Donald Trump, eager to end the conflict, recently suspended military aid to Ukraine, a move that critics fear may embolden Putin. European leaders, however, have continued to stand by Ukraine, reinforcing their commitment to Kyiv’s fight against Russian aggression.
The growing financial burdens on Russia, coupled with increasing international pressure, point to a volatile and unpredictable future for Putin’s war in Ukraine. As the economic cost rises, so too does the determination of Russia’s leaders to press on, regardless of the mounting consequences for their people.
