Russia’s invasion of Ukraine has led to immense financial and strategic costs, far exceeding Moscow’s initial expectations.

Axar.az reports that on February 5, 2025, Andrew Kosenko and Peter Liberman, in an article published in Foreign Affairs, analyze the heavy toll of Russia’s ongoing war in Ukraine.

According to estimates by the U.S. government, by 2025, Russia’s economic losses from the war and Western sanctions could total around $1.3 trillion. This staggering figure includes a direct financial expenditure of about $250 billion for the war effort as of late 2024.

The economic strain has severely impacted Russia’s economy, leading to recession-like conditions, with GDP contraction and a steep decline in living standards for ordinary Russians. Inflation has surged, and the ruble’s value has plummeted, causing widespread discontent among the populace. Additionally, Western sanctions have severely restricted Russia’s access to crucial technologies and international markets, complicating efforts to modernize its economy.

Militarily, Russia has faced significant losses, with tens of thousands of troops killed or wounded and substantial damage to its military hardware. Despite these setbacks, Russia is steadily consolidating control over the territories it occupies in southeastern Ukraine. This includes integrating these areas into Russia’s administrative structures and exploiting local natural resources, particularly lithium, which is essential for high-tech industries and electric vehicle batteries.

However, this integration is costly. Rebuilding infrastructure and providing services in these war-torn regions could cost Russia between $100 billion and $200 billion. Moreover, the integration efforts have met with resistance from local populations, making governance challenging.

On the geopolitical front, Russia’s aggressive actions have isolated it from much of the international community. NATO has expanded, and Western military support for Ukraine has intensified, further complicating Russia’s strategic position.

Despite these mounting challenges, the Kremlin remains defiant, pushing forward with its long-term objectives in Ukraine. This stubbornness risks deepening Russia’s international isolation and exacerbating its internal socio-economic issues.