Russia already spent 35% of annual defense budget - expert

That’s according to Oleksandr V. Danylyuk, chief of the Center for Defense Reforms, Ukrinform reports citing Guildhall.

Citing sources in Ukraine’s intelligence community, Danylyuk said Moscow is not confident in its own military prospects and is looking for an opportunity, at least temporarily, to freeze the military conflict with Ukraine due to the lack of funds to proceed with the invasion at full-swing.

“The ability to continue the war depends on several factors – the availability of personnel, weapons and military equipment, the ability to make up for losses through additional mobilization and (arms – ed.) production, availability of funds to finance the war, as well as public support,” says the expert, who is also a coordinator of the interdepartmental platform for countering hybrid threats, operating within the framework of Ukraine-NATO cooperation.

“According to information obtained by Ukrainian intelligence, as of mid-February, the Russian government as used up 35% of the annual budget allocated for the defense sector. This means that in order to continue the aggression, the Kremlin will have to reduce funding for other expenses, mainly social programs. This will inevitably lead to a drop in public support for the war with Ukraine, to which Russia’s leadership pays special attention due to the upcoming elections 2024,” wrote the head of the CDR.

“Statements by the Russian Foreign Ministry about their readiness to achieve the ‘goals of the special military operation’ through political and diplomatic means also indicate that Moscow is not confident in its military prospects and is looking for ways to freeze the conflict, at least temporarily,” concluded Danylyuk.

It should be recalled that, despite hydrocarbon money, the Russian budget 2022 saw a deficit of RUB 3.3 trillion, and in 2023 the situation worsened. Late January, the Ministry of Finance of the Russian Federation reported a two-fold drop in oil and gas revenues, a 44% reduction in VAT fees, and a RUB 1.8 trillion deficit – a record for January for at least the last 25 years.

The Russian Ministry of Finance budgeted a deficit of RUB 2.9 trillion and made it up based that Gazprom would continue to pump gas to Europe, and that oil would cost $70. But at current Urals prices, the treasury will fall at least RUB 2.5 trillion short.