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Russia’s War Economy for Victory

Russia is reshaping its economy around the war against Ukraine, but a growing debate asks how far militarisation can go without weakening the economic base needed to sustain the war.

Russia reported just 0.6% growth in the first half of 2026, with growth increasingly concentrated in defence-related industries

Civilian businesses face weak investment, labour shortages and cheaper Chinese competition, while resources increasingly flow towards military production

Russia is divided over the way forward: some politicians want greater state control and businesses to contribute to victory, while others argue a functioning civilian economy is essential to sustain the war

Even peace poses a challenge: Alexandra Prokopenko argues Russia has become so dependent on military demand that returning to a civilian economy could itself trigger an economic crisis

Sources: DIE ZEIT⁠, Bank of Russia⁠, Alexandra Prokopenko – Carnegie Russia Eurasia Center⁠

Transparency Note: Use of AI

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