Reuben Johnson
Key Points and Summary – Russia’s draft 2026–2028 budget signals mounting strain on war financing. Opposition economist Vladimir Milov flags seven straight years of >2% deficits and a 2025 shortfall raised to 2.6%, with official claims of later decline dismissed as unrealistic.
-Sanctions have shut Moscow out of global capital; domestic borrowing and dwindling reserves fill the gap as China reportedly rebuffs loans.
-The Kremlin hints defense outlays will fall as a share of GDP, while Rostec’s chief concedes near-zero profitability.
-With transparency shrinking, Russia can likely sustain only lower-intensity warfare—drones, missiles, limited offensives—raising doubts about duration and purpose of its campaign.
Seven Years of Red Ink for Russia: Can Putin Still Pay for Ukraine War?
Last month, the Russian government released a draft of the proposed 2026–2028 federal budget, which purports to show the near-term priorities of President Vladimir Putin.
Vladimir Milov, a Russian opposition politician who left Russia after Putin’s February 2022 invasion of Ukraine, has released a pessimistic assessment of the former KGB lieutenant colonel’s chances of being able to continue to bankroll his war in Ukraine.
Milov is now part of the leadership of the Free Russia Foundation, a think tank based in Washington, D.C.
In his latest report for the Foundation, he projects rough times ahead for Moscow due to a series of unfavorable trends.
According to his analysis, Russia’s budgetary situation is anything but “normal.”
“To keep [Russia’s] military machine running like this, a lot more money is needed — and there simply is not any,” said Milov, who in the early 2000s was an economic advisor for the Russian government.
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