Russia plans to allocate 6.3% of its gross domestic product to fund the war against Ukraine in 2025. This figure is a record for the country since the Cold War. However, despite the enormous expenditures, the military-industrial complex of the Russian Federation is gradually losing its ability to modernize due to international sanctions.
This is reported by Finway
Western Sanctions Lead to Technological Degradation
The restrictions imposed by Western countries have deprived Russia of access to key imported technologies and components. As a result, the Russian defense industry is forced to replace modern parts in weapon production with lower-quality alternatives, negatively impacting the quality and competitiveness of its products.
“Russia will likely have to simplify and slow down its military production, come to terms with a decline in product quality, and experience a certain form of ‘innovative stagnation’ in its research and development,” analysts indicate.
Impact on the Russian Economy and Defense Sector
Experts believe that in the short term, Russian defense enterprises are still capable of producing equipment that poses a real threat to Ukraine and European countries. However, in the long term, technological degradation will complicate Russia’s competition with the leading military powers of the world. At the same time, analysts are already noting negative consequences for the Russian economy related to excessive military spending and the diversion of resources to meet the needs of the defense sector.