Russia’s war economy has problems—but is not about to crash

Photograph: EPA

Jun 22nd 2026|4 min read

IS THIS IT, finally? After four years of sanctions-busting growth, a growing chorus of think-tank economists is calling time on Russia’s war economy. A new report published by the Kiel Institute for the World Economy argues that Russia now faces “structural exhaustion”. Charles Hecker of the Royal United Services Institute reckons that “Russia is probably already in recession”. Nigel Gould-Davies of the International Institute for Strategic Studies, one more, talks of “the coming crisis in Russia’s political economy”. Even Russian official figures point to GDP shrinking by 0.2% in the first quarter, year on year.