Putin can finance war: Economic experts see Ukraine "with its back against the wall"

Russia is suffering from sanctions and a fuel crisis - but experts say Putin can continue to finance the war. At the same time, Ukraine is coming under increasing pressure. There are several reasons for this.

Because of massive Russian attacks, Ukraine's economic prospects are becoming increasingly bleak, according to a new forecast. The country's economy is "with its back to the wall," according to the latest analysis by the Vienna Institute for International Economic Studies (WIIW). The institute, which specializes in Central and Eastern Europe, lowered its expectations for this year's Ukrainian economic growth to 0.6 percent. This is 0.4 points lower than the previous forecast from July.

The growth rate for 2027 was also revised downwards by 0.4 percentage points and is now expected at 2.1 percent - if Ukraine receives enough financial and military support from abroad, it said. However, this appears increasingly uncertain, the experts wrote. “The fifth winter of war is likely to present Ukraine with a tough test,” said Olga Pindyuk, a Ukraine expert at the institute.

Russian airstrikes have destroyed Ukrainian energy facilities and infrastructure as well as loading facilities on the Black Sea. According to the institute, grain exports fell by 70 percent in August compared to July. The steel industry is also suffering massively from the attacks. Strong inflation and high interest rates were also slowing down the economy, it was said.

Expert: Putin can continue to finance war

Russia is also struggling with the consequences of its war of aggression, the WIIW said. But Russia expert Vasily Astrov made it clear: "Next year, President Putin will have no problems financing the war against Ukraine." The state can continue to borrow money from domestic banks.

The institute's growth forecast for Russia is 0.6 percent for 2026 and 1.3 percent for 2027. Ukrainian drone attacks on Russian refineries have led to a fuel crisis that is fueling inflation. Moscow imposed a fuel export ban. As a result, the country benefits less from the currently high world market prices, according to the Viennese economists. Russian industry also has to contend with Western sanctions.