The Russian economy continues to operate in a “military” mode, which has developed due to years of excessive spending on the defense sector. From 2022 to 2024, military expenditures in Russia reached 22 trillion rubles (263 billion USD), and according to the state budget, at least this amount is planned to be spent over the next three years. The combined pressure of high defense spending and Western sanctions creates a significant burden on the country’s economy.
This is reported by Finway
Changes in Production and the Labor Market
A large-scale reorientation of industry towards military needs has led to a substantial increase in the production of armaments. In particular, in 2024, the output of drones increased tenfold compared to 2023 — from 140,000 to 1.5 million units. To support this scale, hundreds of thousands of new workers were recruited into the military-industrial complex, which temporarily helped avoid an economic downturn.
Long-Term Consequences of Militarization
Despite the potential to generate additional income from exporting surplus weapons, the Russian leadership is focused on preparing for a protracted confrontation with Western countries. At the same time, the official position of the authorities indicates that the militarization of the economy will not end even after the war in Ukraine concludes.
Russia could earn income from selling surplus weapons to allies, but the country’s leadership is preparing for a confrontation with the West. Moreover, Russian dictator Vladimir Putin stated during a visit last week to the country’s oldest defense factory that the “need for modern armed forces” will not end with the conclusion of the war.
According to analysts’ estimates, maintaining a militarized economic model could lead to structural imbalances and a deepening of crisis phenomena in the future.