A telltale sign is the Kremlin\u2019s abandonment of any fiscal discipline as the costs of fighting the Ukraine war, which is now in its fifth year, strain existing resources. <\/p>\n
Alexandra Prokopenko, who is now\u00a0a fellow at the Carnegie Russia Eurasia Center, pointed out in a recent Financial Times<\/em> op-ed that the war has forced Russia to unwind its long-touted fiscal restraint.<\/p>\n In a striking example of the turnaround, Russia\u2019s parliament recently gave the finance ministry a blank check to spend more and borrow past its debt ceiling without a formal budget or explicit legislative approval.<\/p>\n That\u2019s as the budget deficit through May is already double 2025\u2019s full-year level, hitting 2.6% of GDP, or about $83 billion. At the same time, Russia\u2019s sovereign wealth fund, which has been tapped to cover budget shortfalls, is being rapidly depleted and just a fraction of prewar levels.<\/p>\n \u201cA cornered autocracy is rewriting the fiscal rules as it goes, cutting parliament out of the loop, and will not admit to dangers it cannot control,\u201d Prokopenko wrote. \u201cIt\u2019s less dramatic than a palace coup, but this is what decline looks like.\u201d<\/p>\n The precipitous deterioration in Russia\u2019s finances coincides with Ukraine\u2019s stunning military successes this year. Advanced drones and new tactics have allowed Kyiv to not hold off the Russian military\u2019s attacks but push them back and regain territory. Long-range drones are also reaching deep into Russia, including St. Petersburg and Moscow, targeting refineries and the defense industrial base. <\/p>\n The result has been devastating battlefield casualties that now outpace the ability to raise fresh recruits as well as soaring death-benefit payouts and widespread fuel shortages across the country. <\/p>\n Meanwhile, the Kremlin has been unable to defend against all of Ukraine\u2019s drone attacks, forcing companies to spend more than $1 billion of their own money on makeshift protection. But Moscow also refuses to reimburse them. <\/p>\n Putin\u2019s \u201cjuggling act\u201d has now come to an end as he can no longer fund his war, keep a lid on inflation, and continue growing the economy all at once, Prokopenko said.<\/p>\n \u201cThe war is increasingly paid for by quietly invoicing the population and suspending the state\u2019s own rules,\u201d she added. \u201cA regime sustained this way is heading for a poorer, angrier country, a financial system out of control, and war funding it cannot count on. The end, when it comes, will spring from this kind of decline, the sort that begins long before anyone names it.\u201d<\/p>\n For now, Putin\u2019s grip on power is secure, but public discontent is growing as average citizens buckle under the pressure of high inflation and onerous interest rates.<\/p>\n Russia\u2019s fuel shortage has added to the misery, creating long lines at gas stations with motorists waiting for hours to fill up. Frustration is boiling over, and fights are breaking out between people struggling to buy rationed supplies of gasoline.<\/p>\n Sefa Karacan\/Anadolu via Getty Images<\/p>\n<\/figure>\n In addition, the Russian military\u2019s \u201cmeat-grinder\u201d tactics in Ukraine, where troops suffer ruinous losses for barely any gain, are creating a backlash. <\/p>\n In fact, the\u00a0average life expectancy\u00a0of a new recruit is about 10 days to three weeks, and once on the battlefield, their survival averages just 20-35 minutes, according to Russian military bloggers.\u00a0<\/p>\n One Russian blogger, who is a veteran the Ukraine war going by the name Aleksandr Lunin, posted a video on Thursday that went viral. In it, he described regular torture of soldiers by their own commanders, according to Radio Free Europe.<\/p>\n Lunin also demanded a live, on-air meeting with Putin and warned that if it did not take place soon, \u201cthe army will turn its weapons against the Kremlin.\u201d He added that he was relaying the sentiment of active-duty military and security officials who met with him earlier. <\/p>\n But he walked back the mutiny threat on Friday, explaining that if soldiers wanted to rebel, they would do it quietly and not ask him to issue a warning for them<\/p>\n Still, the original video was so widespread that Putin\u2019s spokesman was asked to comment on it, and said the Kremlin was aware \u201cthat such an appeal exists.\u201d<\/p>\n Peter Frankopan, a professor of global history at the University of Oxford, cautioned in a Foreign Policy<\/em> article that a revolution in Russia is not likely.<\/p>\n Instead, continued economic pain and disenchantment over the war will convince certain factions in the regime \u201cthat it is time for a new start,\u201d he said, adding that \u201ctoday\u2019s cracks can become tomorrow\u2019s fissures.\u201d<\/p>\n But that could also make Putin more dangerous as fights to cling to power, raising the risk of escalation in Ukraine or other parts of Europe.<\/p>\n \u201cBeware the drowning man: The coming months will likely be dangerous outside and inside Russia as Putin tries desperately to stay afloat,\u201d Frankopan warned.<\/p>\n<\/div>\n![\"\"](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/06\/GettyImages-2281574266-e1782580323199.jpg?format=webp&w=1440&q=100\"\/)
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