Despite the ongoing conflict, the Russian economy is still posting GDP growth, but the war-driven boost from heavy budget spending is fading. This indicates the potential for economic difficulties in the near future. Analysts are raising concerns about the sustainability of the current growth trend, as the initial surge from military spending and energy exports is not guaranteed to continue.
The government’s reliance on increased budget spending to sustain economic activity may be contributing to underlying vulnerabilities. With international sanctions and decreased access to global markets, Russia faces challenges in maintaining its economic performance. The fading war-driven growth suggests that the economy may be heading toward recession, prompting calls for diversification and structural reforms.