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Experts warn that massive spending on the military, contractor wages, and death benefits for families is creating a financial “bubble” that is prolonging the conflict.
The Russian Defense Ministry reported that 385,000 people signed contracts between January and December 2023, attracted by the promised payments. In July, Vladimir Putin doubled contractors’ monthly salaries from 195,000 rubles to 400,000 rubles—ten times the average wage. Additionally, new recruits receive a one-time bonus of 1.2 million rubles.
This military spending and contractor payments have fueled economic growth, largely driven by consumption. The unemployment rate is at a historic low of 2.6%, and in July, the World Bank classified Russia as a “high-income” country.
Despite Western sanctions, the Russian economy is thriving: reduced capital outflow has increased domestic demand, particularly in services. The budget is seeing increased revenue, and imports remain stable.
Le Monde sums it up starkly: “A dead Russian brings more to his family than a living one.” This reflects the grim reality of Putin’s economy, where lives are monetized for meager returns.
Read also: Ukraine has right to defend both on own soil, beyond its borders – Swedish MoD
