Russia’s Militarized Economy Likely to Keep Growing After Ukraine War

Russia’s war machine has become such an integral part of its economic engine that its military industry is likely to keep expanding even after the fighting in Ukraine ends, according to a report from the Center for Strategic and International Studies.

“The end of hostilities will not lead to a radical cut-off of military investment,” wrote CSIS analysts in a report published on Thursday.

Now in its fourth year, Russia’s war with Ukraine continues even as Russian President Vladimir Putin’s administration weathers sweeping Western sanctions. And while cracks are starting to show, the Russian economy may still be able to sustain the war effort for several more years, the report said.

Defense spending is set to hit a post-Soviet record of 6.3% of GDP in 2025 and could climb even higher despite mounting signs of economic slowdown or recession.

“Russia’s economy appears sustainable for the next few years,” the CSIS analysts wrote. They forecast that the Kremlin could maintain its war of attrition through at least 2027.

‘Russia could be preparing for some kind of future confrontation with NATO’

The CSIS report comes amid renewed scrutiny of Russia’s economy.

Manufacturing activity contracted last month, and employment has suffered. GDP growth slowed to 1.4% in the first quarter, down sharply from 4.5% in the previous quarter.

Still, Russia has defied expectations thanks to its growing military-industrial complex.

“Having become the most sanctioned country in the world, it has managed to maneuver around many economic constraints, keeping revenues from energy sales high and its budget balanced, investing in the military and defense industry, ramping up domestic production of weapons and equipment, and boosting economic growth,” wrote the think tank analysts.

Crucially, the militarized economy has built a broad base of political and economic stakeholders — from elites to ordinary workers — who benefit from continued conflict. That makes any significant drawdown in military activity politically and economically unlikely.

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Even if a ceasefire is reached, Russia may still be able to rebuild and expand its armed forces over the next decade.

“Russia’s war-induced socioeconomic changes have been so significant that the process of societal militarization is unlikely to stop even if the war in Ukraine were to end,” wrote the CSIS analysts.

The Kremlin’s strategic posture hasn’t softened either. CSIS suggests Russia is preparing for a long-term confrontation with NATO, using the war to modernize its forces and test Western resolve.

Beyond conventional arms, Russia has ramped up hybrid warfare, including cyberattacks, disinformation, sabotage, political meddling, and strikes on critical infrastructure. These tools allow Moscow to operate aggressively across multiple fronts.

“Despite being inferior to NATO in terms of its conventional capabilities, today’s Russia represents a bigger challenge to European security than it did at the start of 2022,” the CSIS analysts wrote.

The Kremlin is learning from past failures, adapting quickly, and growing more confident in what it sees as a West unwilling to stop it.

“Moscow’s ongoing large-scale military reforms signal that Russia could be preparing for some kind of future confrontation with NATO within roughly the next decade—including even a large-scale conventional war,” they wrote.