Putin vows stronger military amid economic strain in Russia
Vladimir Putin published a message on the occasion of Defender of the Fatherland Day. "We will continue to increase the combat capabilities of the army and navy, as their combat readiness is the most important element of ensuring Russia's security," said the Russian leader.
"Today, in the context of rapid changes in the world, our strategy of strengthening and developing the armed forces remains unchanged. We will continue to improve the combat capabilities of the army, which is the guarantor of our sovereignty, now and in the future," he stated.
He added that he intends to equip the armed forces with new models of weapons and equipment.
On Thursday in Riyadh, the first high-level meeting of U.S. and Russian delegations since the start of the war in Ukraine took place, a week after Putin had a phone conversation with U.S. President Donald Trump. Neither Kyiv nor the EU were invited to the talks in Saudi Arabia, which focused on the war in Ukraine.
Lavrov reiterated after the talks that, for Russia, Ukraine's membership in NATO is unacceptable because it poses a "direct threat to Russia's interests and its sovereignty," as he put it.
He added that Russia will not agree to the presence of NATO troops in Ukraine, a key element of the discussed security guarantees following a possible ceasefire in Ukraine. European allies of Ukraine maintain that only Ukraine will decide on the deployment of a potential peacekeeping mission.
The Kremlin asserts that the Russian economy shows resilience despite the war with Ukraine. However, experts warn that this is only an illusion. They caution about the hidden costs of the war, which Russia may not be able to ignore much longer.
According to CNN, in 2024, Russia's GDP growth was expected to be 3.8 percent, surpassing the United States and Europe. Unemployment was projected to reach a record low, and defense spending, though limiting other sectors, was considered temporary.
CNN: Image of Russia's economy controlled by the Kremlin
However, not everyone is convinced of the sustainability of this growth. Elina Ribakova from the Peterson Institute for International Economics believes that the Kremlin carefully crafts the image of Russia's economy. Economic growth is compared to the effect of "steroids"—rapid but not lasting. Russia may soon face the consequences of this policy, writes CNN.
Craig Kennedy from the Davis Center for Russian and Eurasian Studies warns of the hidden costs of the war. Russia uses an "off-budget financing scheme," which could lead to a credit crisis. The increase in debt of war-related companies may burden banks with toxic debt. Experts emphasize that Western sanctions are starting to take effect, and Russia may not be able to ignore them much longer.
The Russian economy is struggling with a growing budget deficit, which amounted to 3.49 trillion rubles in 2024, primarily due to the costs of the war in Ukraine. Defense spending increased by 30 percent and accounts for 6.31 percent of GDP. Russia plans to allocate at least 40 percent of its budget to defense and national security from 2025 to 2027.
