The war in Ukraine is straining the economy, the military, and internal stability.
After more than four years of aggressive war against Ukraine, Russia is facing increasing difficulties on the military, economic, social and diplomatic fronts. The problems, which are both structural and temporary, are accumulating and are fueling the perception that Russian power is gradually weakening. While these weaknesses have not yet been enough to thwart the Kremlin’s objectives in Ukraine, they are making it increasingly difficult to sustain Moscow’s triumphalist rhetoric.
CHALLENGES ON THE BATTLEFIELD
On the military front, massive drone and missile attacks against Ukraine, which are increasingly hitting civilian areas and vital infrastructure, as well as the use of the Orechnik ballistic missile, are interpreted as attempts to mask the difficulties that the Russian military is experiencing on the ground.
According to the analysis, the advancement of Russian forces has slowed significantly and in some sectors has even been reversed since the end of 2025. One of the main problems remains the shortage of military personnel. Russia is losing about 35 thousand soldiers per month, while managing to recruit about 30 thousand. This gap is forcing the Kremlin to continue covert mobilization through quotas imposed on companies and universities, as well as to increase the recruitment of foreign nationals from Central Asia and Sub-Saharan Africa.
Another serious problem for Moscow is Ukraine’s technological advancement in the use of drones. The innovative Ukrainian ecosystem is enabling Kiev’s forces to strike strategic targets deep inside Russian territory, including military industry, logistics facilities, command systems, and energy infrastructure. This has significantly reduced the effectiveness of Russian offensives on the front lines.
ECONOMY IN A DOWNWARD SPIRAL
Economically, Russia is entering an increasingly problematic phase. The analysis estimates that the economy is polarizing between the military-industrial complex, favored by the state, and the civilian economy, which is suffering from high interest rates and a lack of investment.
The base interest rate of 14.5 percent is holding back economic activity, while bankruptcies among small and medium-sized enterprises are on the rise. International sanctions and the economic overheating of 2022–2024 continue to produce negative consequences.
Forecasts show that economic growth in 2025 will be only about 1 percent, while inflation remains high, at 5.6 percent. At the same time, the labor market is facing a labor shortage due to the emigration of about 650 thousand citizens, mainly young and educated, as well as losses caused by the war.
Experts warn that the war is consuming Russia’s human and productive capital. The replacement of Western markets with cheap Chinese imports and the decline in investment are damaging the country’s long-term potential for economic development.
DEFICIT AND TENSIONS WITHIN THE KREMLIN
Financial pressure on the Russian state is mounting. The public deficit for 2025 is projected to reach 2.6 percent of Gross Domestic Product, much higher than the initial forecast of 0.5 percent.
To cover the lack of revenue, the authorities are increasing the fiscal burden on citizens and businesses. One of the measures is the increase in VAT from 20 to 22 percent starting from January 1, 2026. Even the additional revenues from the increase in hydrocarbon prices are not enough to eliminate the deficit, which is already considered structural.
The report also highlights that tensions are also emerging within state structures, to the extent that President Vladimir Putin has publicly demanded explanations from officials responsible for the shortcomings identified.
GROWING DISSATISFACTION IN RUSSIAN SOCIETY
On the social front, discontent is growing. The ongoing restrictions on mobile internet, the ban on Telegram, and the crackdown on VPN use have caused negative reactions not only among citizens and businesses, but also among opposition parties controlled by the system.
Dissatisfaction has also been compounded by problems with flood management in Dagestan, the environmental consequences of Ukrainian attacks on Russian refineries, and suspicions of uncontrolled epidemics in the livestock sector in Siberia.
A new element is war fatigue. According to an internal poll by the state-run VTsIOM institute, 56 percent of Russians say they are “very tired” of what the Kremlin continues to call a “special military operation.” At the same time, President Putin’s popularity has suffered its biggest decline since the start of the war. Support for him has fallen from 75 percent in February to 65.6 percent in April, the lowest level since February 2022.
THE BALANCE OF POWER REMAINS ON MOSCOW’S SIDE
However, the analysis concludes that, despite the growing weaknesses, the overall balance of power continues to favor Russia. Ukraine is managing to hold its ground and inflict significant damage, but Moscow still has the advantage in human, military, and economic resources.
For this reason, the report’s authors argue that pressure on Russia should continue and intensify through economic sanctions, the fight against the so-called “ghost” fleet that evades international restrictions, and through confrontation in the field of information and propaganda.
The war in Ukraine is entering a phase where Russia’s internal weaknesses are becoming increasingly apparent. However, they have not yet become a decisive factor that could change the course of the conflict. The main question remains whether these problems will continue to deepen in the coming years or whether the Kremlin will find ways to cushion their consequences.