PARIS.– More than four years after the start of the “special military operation” in Ukraine, which was to bring Kremlin tanks to kyiv in three days, Russia seems inexorably approaching the abyss. On the front, the Army is stagnant, human attrition is catastrophic, the State coffers are empty, while Vladimir Putin makes his citizens directly pay the bloody bill, suffocated by repression and increased taxes.
For a long time, the Russian economy seemed to defy the forecasts of the Western Cassandras. Despite massive sanctions, the Kremlin displayed lauded growth rates as proof of Moscow’s supposed resilience. But appearances are deceiving: that initial growth was nothing more than a mirage in a massively subsidized war economy that is now running out.
Four years and two months after the start of the conflict, the situation has taken a radical turn. Rampant inflation, exorbitant 16% interest rates, a critical labor shortage and a precipitous decline in energy sector revenues are plunging the Russian economy into inevitable stagnation.
For the first time since the start of the war, Vladimir Putin’s popularity fell below 70%. For the seventh consecutive week, his approval rating fell again, this time standing at 65.6%, according to the latest survey by the official VTsIOM institute (compared to almost 75% at the beginning of February).
“At the same time, the supposed salvation that China offers is becoming a dangerous dependency, reducing Russia to a mere colony of resource exploitation,” says Claude Blanchemaison, former French ambassador in Moscow.
But now the war is beginning to be reflected in a concrete way in the daily life of the Russian population, something that until now had not happened with this intensity. For two months, Russians have suffered a massive cut in digital services that pushes them to lifestyles typical of past decades.
You can no longer pay by card in many establishments, request services through applications or pay for parking quickly and automatically. He economic impact It has been immediate for numerous businesses, both in the capital and in the rest of the country, hit by an unprecedented disruption of the digital system.
“88% of transactions in the consumer market are carried out with a bank card, often through mobile connections,” explains to L’Express the economist Vladislav Inozemtsev. “Today, the Russians are taking a big step back. Why? Simply because of Putin’s will,” he adds.
It is the FSB – successor to the KGB – who is in charge of that censorship operation which affects access to the Internet, the Telegram messaging application – which has about 100 million monthly users in Russia – and VPNs, which allow you to circumvent prohibitions by securing the connection and hiding the location.
“The security services want to create a digital gulag because they consider the Internet to be a threat. But this is generating enormous tensions in society,” he comments. Alexander Kolyandr, non-resident researcher at the Center for European Policy Analysis.
The problem is made even worse by intermittent network outages, which prevent residents of Ukraine’s border areas from being alerted during drone attacks. For its part, Telegram ban directly affects Russian military units, the same as all official organizations, which used it as a means of internal communication and as their main propaganda tool. Discontent is growing, to the point that even those close to power are making their voices heard, even at the risk of their own lives.
That’s what happened to the pro-Kremlin blogger Ilya Remeslo, who ended up admitted to a psychiatric hospital after having called for Putin’s “resignation” and criticizing a “dead end war” which is costing the Russian economy billions of rubles, not to mention the numerous officials who, curiously, decide one after another to fall from their balconies.
“For the first time since the large-scale invasion of Ukraine in 2022, The Russian elite seems to be on the verge of a schism. Although each criticism taken individually may seem insignificant, as a whole it is significant,” says the political scientist. Tatiana Stanovaya in a recent note posted on the Carnegie Russia-Eurasia Center site.
The situation is so tense that this week reports have multiplied according to which Vladimir Putin would live “bunkerized” for fear of a coup d’état or even an attempt on his life.
And the reasons for this popular indignation are not few. On the front, the Army is stagnant: since the beginning of 2024, it has conquered less than 1.5% of Ukrainian territory, according to an analysis by the Center for Strategic and International Studies. Russian losses are estimated at 1.2 million casualties, including dead, wounded and missing.
To hold your “special operation”, The Kremlin has turned its economy towards military production and the state coffers are almost empty. In the first quarter of 2026, the deficit had already exceeded official forecasts for the entire year, reaching almost $61 billion.
In 2023 and 2024, Russia experienced artificial growth, fueled by military spending. The federal budget increased from 32.35 trillion rubles in 2023 to 40.2 trillion in 2024, an increase of 25%. However, this effect dissipated in 2025. What’s worse: it has left behind an exhausted economy, dependent on a military sector that does not generate wealth or sustainable employment. According to Defense Minister Andrei Belousov, real military spending – including classified budgets – reached 7.3% of GDP in 2025, much higher than the officially declared 2.9%.
The problem? This manna only benefits a tiny minority. Arms factories, such as the Motovilikha Plants in Perm, are operating at full capacity, but the rest of civilian industry is collapsing. A manager at NPN Holding, a manufacturing company, told Pskov regional radio: “Relaunching Russian industry is now impossible. There is no market, no credit, no possibility of acquiring high-tech equipment.” Even China, known for its pragmatism, now refuses to sell machinery to Russia for fear of Western sanctions.
And, since it has no other solution, the regime has decided that the population will pay the bill with increasingly exorbitant taxes.
“The figures circulating are correct. In 2025, state revenues from oil and gas – hit by Western sanctions and Ukrainian attacks – represented only 23% of the budget, the lowest percentage in 20 years. To compensate for those losses, the Kremlin expanded the VAT tax base.
After increasing from 20% to 22% at the beginning of the year, That tax now affects many more companies. Until now, companies with a turnover of less than 60 million rubles (about $801,000) were exempt from VAT, but this limit will drop to 20 million in 2026, and to 10 million ($133,000) by 2028,” confirms Alexandre Melnik, former Russian diplomat, professor at the ICN Business School.
This situation has significantly affected the spirit of the Russian business community. According to a study by the Public Opinion Foundation of the Moscow Higher School of Economics, one in three planned to close their company by the first quarter of 2026: a drop of 8 points compared to the same period last year.
“Investments aimed at weapons and the military-industrial complex, in reality, do not benefit anyone and the structural problems get worse,” he observes. Tatiana Kastouéva-Jean, director of the Russia/Eurasia Center of the French Institute of International Relations (IFRI). “Money is very expensive, the tax pressure increases… Businessmen can no longer work normally. They are in permanent crisis management and they don’t see a way out,” he adds.
For its part, infrastructure continues to crumble due to lack of investment. Incidents in heating, electricity and water networks are countless. And Russia’s own Accounts Chamber itself states that the same thing happens with public transportation. The institution estimates that nearly 90% of budgeted transportation infrastructure development projects had not been completed as planned.
“Even in the poorest regions of China, income levels exceed those of the poorest regions of the Russian Federation. The Russian population decreases by 600,000 people every year. Average annual GDP growth over the last decade has been 1.5%. In that same period, consumer prices have increased by 77% (…) And, for a reason that I do not know, the president does not demand anything or punish anyone,” he denounced. Robert Nigmatullin, professor and academician at the Russian Academy of Sciences, in a speech in early April during the Moscow Economic Forum.
Vladimir Putin himself acknowledged live on television that the country was facing “a declining economic dynamic”, demanding quick measures from his lieutenants to revive growth.
But it is not all bad news for the Kremlin, which should benefit considerably from the situation caused by the iran war and its direct consequence, the increase in the price of oil, fertilizers and cereals. However, according to specialists, much more would be needed to clean up the economy.
Because the indignation grows. In Volgograd, spontaneous demonstrations against rising prices broke out. In Pskov, merchants organized a tax strike, refusing to pay the increased VAT. In Moscow, retirees demonstrated in front of the Kremlin to demand an increase in their pensions, frozen since 2022.
“The Kremlin responds with repression. Protesters are arrested, independent media silenced and social media censored. But the indignation is there, latent, deep, and will only increase as the crisis worsens,” warns Alexandre Melnik.
Since 2022, more than a million Russians have left the country, according to OECD estimates. Engineers, doctors, entrepreneurs, artists. A hemorrhage of talent that Russia cannot afford. For Putin, these games are a betrayal. For the Russian economy, they are a catastrophe.
Irony of history: as Russia sinks into crisis, Ukraine, despite the war, projects 2% growth by 2026. A modest figure, but symbolic. Symbolic, because it shows that even under bombs, Ukraine manages to stay standing. Meanwhile, Russia crumbles under the weight of its own contradictions.
As it is, the Kremlin’s options are limited.
“I could try a truce in Ukraine – like the one Putin just proposed for May 9? – but that would mean admit failure. It could reduce military spending, but that would weaken its position vis-à-vis NATO. He could seek an agreement with the West, but after two years of war and repression, who would trust him again?” analyzes Sergei Jirnov, former KGB intelligence officer.
In his opinion, the only way out for Vladimir Putin is persistence: “Continue the war, continue lying, continue repressing. Until the system collapses under its own weight.”
