Listen to the article
Russian Military-Industrial Complex No Longer Driving Economy as Production Collapses
For the first time in three years, Russia’s military-industrial complex has ceased to be the driving force behind the country’s economy, according to Andriy Kovalenko, head of Ukraine’s Center for Countering Disinformation of the National Security and Defense Council.
The production of tanks, armored vehicles, and metal products fell by 6-20% in September alone, marking a significant reversal for what had been a rare bright spot in Russia’s war-focused economy.
“Rosstat is hiding the scale of the decline, but it’s already officially known that GDP growth has stalled, budget revenues have fallen by 21%, and the deficit is five times larger than planned,” Kovalenko reported on Monday.
The downturn comes at a particularly challenging time for the Kremlin, which is preparing to implement a series of unpopular economic measures. Starting January 1, the Russian government will raise the value-added tax (VAT) from 20% to 22%, while simultaneously eliminating benefits for small businesses.
“The Kremlin is effectively taking money from the middle class to finance the war,” Kovalenko explained. “Meanwhile, prices for essential foods like chicken and pork are rising by 30%, entrepreneurs are closing their businesses, and even Putin and Patrushev no longer control the situation in the food market.”
The energy sector, long considered the backbone of the Russian economy, is also showing signs of severe strain. Gazprom has reportedly shifted its losses onto the general population, while the Russian Ministry of Finance has begun cutting expenses across various sectors.
Recent U.S. sanctions against Russian oil giants Rosneft and Lukoil have dealt another significant blow, effectively closing off the Indian market for Russian energy exports. The impact was immediately felt on the Moscow Exchange, where shares of both companies led the decline among “blue chip” stocks. Within just two days, their combined market capitalization dropped by 424 billion rubles (approximately $5.2 billion).
“The only major buyer that remains is China,” Kovalenko noted, adding that on October 30 in Busan, former U.S. President Trump and Chinese President Xi Jinping are scheduled to discuss “Russia’s future without its participation.”
This geopolitical shift comes as the Trump administration reportedly prepares additional sanctions that could target key sectors of the Russian economy if Putin continues to prolong the war in Ukraine.
Analysts suggest that the military-industrial complex was one of the few sectors generating employment and economic activity amid Western sanctions. Its decline removes what had been a crucial pillar supporting Russia’s wartime economy.
“When a warring country cannot even maintain its military-industrial complex, it’s not just a crisis—it’s a financial collapse,” Kovalenko concluded. “To avoid becoming China’s eternal colony, Russia has only one way out—to end the war and save the economy.”
The economic deterioration could have far-reaching implications for Russia’s ability to sustain its military operations in Ukraine. Defense manufacturing requires significant capital investment, skilled labor, and complex supply chains—all of which are increasingly difficult to maintain under current conditions.
Economic experts have long warned that Russia’s war-focused economic policy was unsustainable in the long term. The redirection of resources toward military production has come at the expense of civilian sectors and infrastructure development, creating structural imbalances that appear to be reaching a breaking point.
As winter approaches, bringing higher energy costs across Europe, Russia’s economic struggles may influence its strategic calculations regarding the ongoing conflict in Ukraine and its broader position on the international stage.
Verify This Yourself
Use these professional tools to fact-check and investigate claims independently
Reverse Image Search
Check if this image has been used elsewhere or in different contexts
Ask Our AI About This Claim
Get instant answers with web-powered AI analysis
Related Fact-Checks
See what other fact-checkers have said about similar claims
Want More Verification Tools?
Access our full suite of professional disinformation monitoring and investigation tools
16 Comments
It’s quite remarkable to see the Russian military-industrial complex, which has been a mainstay of the economy, now facing such significant production declines. This could signal broader structural issues within Russia’s defense sector and the overall economy. The Kremlin’s response to raise taxes on the middle class is a concerning development.
Absolutely, the collapse in tank and armored vehicle production is a stark indicator of the challenges facing Russia’s military-industrial base. The economic ripple effects are likely to be substantial, and the government’s tax hikes on the middle class seem like a short-sighted attempt to plug the holes.
This is a concerning development that could have far-reaching implications for Russia’s military capabilities and the overall economy. The reported drop in tank and armored vehicle production is a clear sign that the military-industrial complex is no longer the driving force it once was. It will be important to see how the Kremlin responds to these challenges.
You’re right, the collapse in military production is a serious issue for Russia. The government’s plan to raise taxes on the middle class is a worrying move that could further strain the economy and fuel public discontent.
This is a concerning development for the Russian military-industrial complex. If production of critical war materials like tanks and armored vehicles is collapsing, it could seriously undermine Russia’s military capabilities in the long run. The economic impacts are also worrying, as the Kremlin appears to be squeezing the middle class to fund the war effort.
You’re right, this decline in production suggests the Russian military industry is really struggling. The government’s plan to raise taxes on the middle class is just going to further strain the economy and people’s livelihoods.
This is a significant development that could signal deeper issues within Russia’s defense sector and economy. The collapse in military production is a stark indicator of the challenges the Kremlin is facing, and the planned tax hikes on the middle class are likely to exacerbate the situation. It will be important to follow how this situation evolves.
Absolutely, the reported declines in tank and armored vehicle production are a major red flag. The Kremlin’s efforts to raise taxes and eliminate benefits for small businesses suggest they are struggling to find solutions to these economic pressures.
The reported drop in tank and armored vehicle production is a clear sign that the Russian military-industrial complex is struggling. This could have far-reaching implications for Russia’s military capabilities and the broader economy. It will be important to monitor how the Kremlin tries to address these challenges.
Definitely a worrying development. The economic pressures facing Russia are mounting, and the government’s response to raise taxes on the middle class seems like it could backfire and further erode public support.
This is an interesting development, as the Russian military-industrial complex has been seen as a key driver of the economy in recent years. The reported 6-20% drop in tank and armored vehicle production is quite significant. I wonder what other sectors are being impacted as well.
Agreed, it will be important to watch how this evolves. The Kremlin’s efforts to raise taxes and eliminate benefits for small businesses could further exacerbate the economic challenges facing Russia.
The decline in Russia’s tank and armored vehicle production is a sign that the military-industrial complex is no longer able to prop up the broader economy. This could have serious implications for Russia’s war efforts and its ability to maintain its military capabilities long-term.
You make a good point. If Russia is struggling to produce basic military hardware, it doesn’t bode well for their ability to sustain a prolonged conflict. The economic pressures are clearly mounting.
This is a surprising and significant development. The Russian military-industrial complex has long been viewed as a key driver of the country’s economy, so to see such a sharp decline in production of critical military hardware is quite concerning. It will be interesting to see how the Kremlin responds to these challenges.
You’re right, the collapse in military production is a major blow to Russia’s economic model. The government’s plan to raise taxes on the middle class is a concerning move that could further strain the population and potentially fuel discontent.