Russia Faces Economic Shift as War Costs loom, Potential Cuts Anticipated
OSLO, Norway – Russia’s economy is bracing for a potential recalibration following the war in Ukraine, with experts suggesting that while costs might potentially be reduced upon conflict resolution, military spending is highly likely to remain substantially elevated compared to pre-2022 levels. The analysis comes as Moscow navigates the ongoing challenge of sustaining troop numbers and maintaining domestic support amidst the protracted conflict.
The war has driven Russia to rely heavily on economic incentives to bolster recruitment, offering soldiers salaries placing them within the top 10-15 percent of earners in the country, alongside substantial signing bonuses. This strategy provides financial benefits previously inaccessible to many, according to researcher Maria Udal. Though, the long-term economic implications of this approach, and the potential for a shift in spending priorities, are now coming into focus.
Udal explains that a key challenge for Russian authorities has always been securing sufficient soldiers without alienating the population. “Economic incentives clearly appear to be the most significant recruitment method for the regime,” she stated.
While a reduction in remarkably high wage costs is possible if the war concludes, experts anticipate continued high military expenditure due to the need to replace lost equipment and rebuild defense capabilities. The scale and nature of Russia’s post-war defense structure remain uncertain, influencing the extent of potential cost savings.
The financial strain of the conflict is prompting a reassessment of Russia’s economic trajectory, with implications for both domestic stability and its geopolitical standing.
(Photo: Anders Fehn (FFI))
