In a recent Reuters article, journalists examine Russia’s wartime economy and the growing signs of strain emerging after more than four years of full-scale war against Ukraine. The report highlights a new study by researchers from the Kiel Institute for the World Economy (IfW) and the Stockholm Institute of Transition Economics (SITE), which analyzes the mounting economic pressures facing the Kremlin. Their study, Endgame: Russia’s War Economy Reaches Its Limits, points to declining fiscal reserves, falling energy revenues, and severe labor shortages that are weakening Russia’s economic outlook.
Torbjörn Becker on Russia’s Growing Vulnerabilities
The analysis featured commentary from Torbjörn Becker, Director of the Stockholm Institute of Transition Economics (SITE) and co-author of the study. According to the research, Russia’s liquid sovereign wealth fund assets have fallen sharply since the start of the war, while government budget deficits have already exceeded official targets. Torbjörn Becker emphasized that Russia’s growing economic vulnerabilities create an opportunity for more effective Western policy measures. He argued that renewed efforts to restrict Russia’s shadow fleet, strengthen export controls, and reduce export revenues could significantly increase economic pressure on Moscow.
Structural Challenges Facing the Russian Economy
The Reuters article also explores the structural challenges limiting Russia’s ability to sustain military spending. Researchers note that the Kremlin increasingly relies on off-budget financing, rapid credit expansion, and indirect support from the banking sector to fund the war effort. At the same time, labor shortages have reached record levels, constraining production capacity across key sectors.
The study further highlights Russia’s growing dependence on China, which now accounts for approximately 35 percent of Russian foreign trade and supplies many critical dual-use technologies and military-related components. According to the researchers, this dependence has created an increasingly asymmetric relationship in which Beijing holds greater economic leverage over Moscow.
Policy Recommendations for Western Governments
A key recommendation discussed in the article is the introduction of stronger trade and sanctions measures by Western governments. Torbjörn Becker and his co-authors argue that tightening sanctions enforcement and targeting channels used to circumvent existing restrictions could have a greater impact than imposing broad new sanctions alone. The study also underscores the importance of limiting access to critical technologies and reducing Russia’s ability to finance military activities through export earnings.
To read the full Reuters article, please refer to the original Reuters coverage of the study Endgame: Russia’s War Economy Reaches Its Limits.
Further Reading
Readers interested in the broader topic of sanctions on Russia and Russian economic retaliation can explore our dedicated online portal, which brings together expert analysis, data, and research on the evolving sanctions landscape. The platform provides valuable resources for researchers, journalists, policymakers, and the wider public seeking evidence-based insights into sanctions policy and economic resilience.
Explore the Sanctions Timeline, which provides a chronological overview of major sanctions packages imposed by Western allies in response to Russia’s full-scale invasion of Ukraine, alongside Russian countermeasures and domestic adaptation policies.
Visit the Evidence Base to access the latest publications, policy briefs, and research reports examining the effectiveness and impact of sanctions:
For additional media appearances and expert commentary from Torbjörn Becker and other members of our research team, explore our Media Highlights section:
As discussions about Russia’s economic outlook continue, Torbjörn Becker’s analysis provides important evidence on the challenges facing the Russian war economy and the policy options available to Western governments.
