Russia is now on the back foot in its war with Ukraine, having recently crossed the threshold of 1 million total casualties while its spring offensive collapses without having made any major gains. This is happening as Ukraine is ramping up its own attacks on Russian territory. But it’s not just that Russia is losing momentum militarily; it’s also facing economic headwinds.
Is Russia’s wartime sugar rush over? How is the condition of Russia’s labor market? Can Russia’s war economy afford to stop fighting?
Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.
Cameron Abadi: Is it fair to say that Russia is on this back foot economically right now?
Adam Tooze: There’s certainly a slowdown. In 2023, 2024, the Russian economy grew by 4 percent. I mean, it’s a $3 trillion economy. So those are substantial numbers. And yes, after contracting mildly in the first quarter of 2026, Russia’s growth is now expected to be as little as 0.4 percent over the whole year, which is kind of in the same ballpark as Germany, for instance. So this is not an economy that’s collapsing, but this is an economy which is no longer growing at the clip that it was earlier in the war. This is a surprise because oil prices are high as a result of the American and Israeli war in Iran. And you would expect that to be boosting Russian growth.
