(KYIV, UKRAINE) – The Russian economy is approaching a critical exhaustion point as growth collapses and international pressure intensifies. According to Ilona Khmeleva, Secretary of the Economic Security Council of Ukraine, the Russian Federation will likely lack the necessary instruments to sustain its invasion within one to three years. The Russian dictator recently admitted that national growth for 2025 dropped to just 1 per cent. While the Kremlin claims this slowdown is a managed attempt to curb inflation, analysts suggest the figures reflect the mounting impact of international sanctions and the high cost of military spending.
Data from Ukrainian intelligence indicates that domestic consumption in Russia has fallen significantly. Retail activity during the recent festive period saw a 20 per cent decline in shoppers compared to previous years. This suggests that the Russian public is beginning to feel the weight of the economic restrictions. Khmeleva noted that the Russian dictator can no longer maintain the narrative that the economy remains unaffected by the ongoing conflict and global isolation.
The energy sector, which serves as the primary revenue source for the Kremlin, faces severe disruptions. Crude oil production has fallen to approximately 9.3 million barrels per day. Although Russia utilizes a shadow fleet of between 2,000 and 3,000 vessels to bypass export caps, 122 of these ships remain registered or owned within Europe, providing the European Union with significant leverage. Ukrainian long range strikes on Russian refineries have further degraded the energy infrastructure. These military actions are described by Ukrainian officials as a highly effective form of physical sanctions that produce immediate economic consequences.
Russia remains heavily dependent on China for components and manufacturing equipment. Many Chinese firms facilitating these trades also maintain significant business ties with the European Union. Experts argue that secondary sanctions targeting these companies could further restrict the Kremlin’s ability to procure essential military industrial parts. India also remains a major purchaser of Russian sea borne crude oil, accounting for 25 per cent of such exports last year. Ukrainian officials believe that without the continued economic support of Beijing and New Delhi, the Russian Federation would already be unable to proceed with the war.
The European Union recently finalized a loan deal worth €90 billion ($97.2 billion) for Ukraine. This package includes €60 billion ($64.8 billion) for military requirements and €30 billion ($32.4 billion) for civilian support and salaries. The first payments are expected in April 2026. While the funding is vital, there is ongoing frustration in Kyiv regarding the failure to utilize frozen Russian assets directly. International lawyers argue that under global norms, the state responsible for the aggression should bear the financial burden rather than European taxpayers.
Inside Ukraine, the humanitarian situation remains grave due to persistent Russian strikes on civilian energy infrastructure. In Kyiv and other major cities, thousands of homes are without heating or electricity during a harsh winter. Energy production capacity has dropped dramatically, often leaving critical infrastructure with only a few hours of power per day. Ukrainian officials maintain that these strikes are a deliberate military strategy intended to use civilian suffering as leverage during negotiations.