Kremlin hides economic troubles and war losses to pressure West – ISW
Russian President Vladimir Putin (photo: Getty Images)
Russian President Vladimir Putin is trying to present the Russian economy as one capable of sustaining a prolonged war against Ukraine, according to a report by the Institute for the Study of War (ISW).
Analysts note that during a meeting of the Strategic Development Council, Putin focused on the Kremlin's supposed measures to support families and increase birth rates.
"Putin stated that the birth rate continues to decline, including due to unspecified 'external challenges' – likely in part referring to the demographic impacts of the war in Ukraine," ISW points out.
Putin also stated that by the end of 2025, Russia's GDP growth would be about 1%, and inflation would remain at 6% or lower. At the same time, the Russian Central Bank predicts inflation of 4–5% in 2026. He claims that the Russian economy can "move forward" with low unemployment.
However, according to ISW, the real economic situation in Russia is significantly worse than the Kremlin is trying to show. Analysts note that Putin deliberately avoids mentioning the war in Ukraine in his economic speeches so as not to link economic problems with military losses and expenses.
The report also states that the increase in such statements ahead of the US–Russia meeting in Moscow on December 2 indicates Putin's attempt to convince Washington that sanctions pressure is ineffective and that Russia cannot be forced into compromises.
ISW emphasizes that the Kremlin is promoting two false narratives — about a stable economy and the inevitable victory of Russia. They are aimed at creating a sense of hopelessness for the West and Ukraine and pushing them to accept Moscow's conditions.
Analysts stress that, in reality, Russia has several critical vulnerabilities — both on the battlefield and in the economy — that may force the Kremlin to make real concessions.
Sanctions against Russia
The European Union has been imposing sanctions against Russia since 2014, and after the full-scale invasion in 2022, it significantly expanded the list.
As of 2025, the EU has adopted 19 sanction packages and is working on the twentieth. Each new package increases sanctions pressure: new individuals and legal entities are added to the lists, and the range of dual-use goods is expanded.
According to forecasts, the twentieth sanctions package may be approved in January 2026.
In addition, it was recently reported that the European Union is considering new measures against participants involved in the so-called shadow fleet of Russian tankers.
