Russia is increasingly losing ground both on the battlefield and economically.
Volodymyr Zelenskyy and Putin / © TSN
Since the start of the full-scale war, Ukraine was largely perceived as being in a significantly weaker position. However, this year the situation has begun to shift, with the advantage gradually moving in Kyiv’s favor.
This is according to economic commentator Martin Sandbu in his column for the Financial Times.
The author believes that Ukraine has achieved a substantial technological and military advantage, which is gradually altering the balance of power on the front lines. Simultaneously, Russia is facing growing economic difficulties, and its capacity to sustain the war without large-scale economic mobilization is increasingly narrowing.
Sandbu notes that the Russian army is losing between 30,000 and 40,000 soldiers monthly.
He attributes this significantly to Ukraine’s breakthroughs in military technology.
The commentator also highlighted that over the past three months, Russia has been progressively losing control of certain territories. Furthermore, Ukrainian strikes on Russian targets, particularly oil refineries, have curtailed the Russian Federation’s export capabilities.
Additionally, the author points out that operations by Ukrainian forces against the occupying administration in Crimea have compelled the occupying authorities to implement a state of emergency following power outages and fuel shortages.
Sandbu emphasized that Russia’s economic potential is, in effect, already depleted.
In his view, the real inflation rate in the Russian Federation exceeds official figures, indicating Moscow’s lack of additional resources to support the economy.
The commentator also noted that the Russian government has already surpassed its planned budget deficit for the entire year. While the economy grew in the first quarter, a decline has since resumed, and substantial payments to families of fallen and wounded soldiers are already significantly impacting the macroeconomic situation.
As the author states, a report from the Kiel Institute suggests that Russia has nearly exhausted its main economic reserves that allowed it to sustain the economy during the war.
Meanwhile, even a temporary rise in global oil and gas prices during the conflict with Iran did not bring Moscow the expected benefits due to Ukrainian strikes on energy infrastructure.
Moreover, the Kiel Institute has drawn attention to stricter European actions against Russia’s “shadow fleet” and the reinforcement of trade sanctions, which hinder the use of export revenues for the purchase of military-purpose goods.
Sandbu also stressed that despite continuous Russian attacks, Ukraine has managed to partially compensate for the decline in production that has been ongoing since 2022.
Projections indicate that the Ukrainian economy will continue to show growth this year.
The commentator noted that Ukraine remains dependent on financial support from allies to cover military expenses. However, he added that over the past year, it has become evident that Europe is actively filling the gap created by the reduction in American aid.
Sandbu recalled that the European Union previously agreed to provide a loan of 90 billion euros, and European funding is already being directed towards the development of Ukraine’s defense industry.
In the observer’s opinion, the current changes reflect a genuine turning point in the war in Ukraine’s favor.
He believes that Kyiv’s allies should seize this “window of opportunity” to further strengthen Ukraine’s position and limit Russia’s ability to continue the war.
Sandbu is convinced that this can be achieved through further tightening sanctions against Moscow and combating schemes to circumvent them.
Furthermore, in his view, transferring frozen Russian assets to Ukraine as an advance payment for future reparations will further enhance Ukraine’s defense capabilities.
It was previously reported that Ukrainian drone strikes on Russian oil refineries are having an increasingly strong impact on the Russian Federation’s fuel market.
We previously informed that the Kremlin’s military expenditures are exceeding budget plans, and debt servicing has become one of the largest items of state expenditure in the Russian Federation.
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