ISW: Putin exaggerates flexibility of Russia’s economy

Kremlin ruler Vladimir Putin is trying to project an unrealistic image of Russia’s economy as strong enough to sustain a long war in Ukraine, the Washington-based Institute for the Study of War (ISW) reports.

According to analysts, this is part of the Kremlin’s broader information effort that is aimed at promoting the false narrative that a Russian victory is inevitable.

Putin has claimed that Russia’s economic growth will reach about one percent by the end of this year and that inflation will remain at or below 6 percent, while the Central Bank forecasts inflation of four to five percent in 2026, ISW says.

Putin also said that Russia can gradually build “economic momentum” while maintaining low unemployment and moderate inflation.

“The Kremlin’s recent economic policies indicate that the Russian economy is doing markedly worse than Putin’s statements seek to suggest, however,” ISW says.

In the run-up to the Dec. 2 U.S.-Russia meeting in Moscow, Putin intensified efforts to portray the Russian economy as resilient and capable of sustaining a prolonged war in Ukraine. His remarks on Dec. 8 were likely intended to serve a similar purpose, namely to influence ongoing peace negotiations, analysts say.

“Putin is likely attempting to convince the United States that increased sanctions pressure will not have its intended effect on the Russian economy and will not push Putin to make compromises to end his war against Ukraine,” the text reads.

The Kremlin leader rarely mentions the war in Ukraine in his economic speeches, likely in an effort to obscure the link between Russia’s battlefield losses and its growing economic problems.

According to the ISW, the Kremlin is attempting to align its economic messaging with the false narrative of an inevitable Russian victory on the battlefield.

“ISW continues to assess that the West and Ukraine can leverage several key Russian battlefield and economic weaknesses to force the Kremlin to negotiate and make real concessions and that a Russian victory is not inevitable.”