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
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