In a staggering revelation, Russia has reportedly spent a colossal $167 billion on its full-scale invasion, with Ukraine managing to destroy approximately $34 billion worth of Russian equipment as of August 24, according to data published by the General Staff of Ukraine’s Armed Forces and reported by Forbes. This figure, it must be noted, does not account for Russia’s defense spending not directly linked to the war, nor does it factor in Russia’s economic losses due to the international sanctions imposed on it.

The bulk of Russia’s war expenditure is funneled into army supply, costing a hefty $51.3 billion, followed by military salaries at $35.1 billion and compensations to the families of the fallen soldiers, which stands at $21 billion. Interestingly, the depreciation of the ruble against foreign currency has resulted in a significant drop in per-soldier budget expenses from $200 per day to $120 per day. However, despite Russia’s continued supply of hydrocarbons to other countries, including EU member states, Forbes cites Reuters data to suggest that these revenues may not suffice to offset the skyrocketing expenses.

Russia’s Costly Invasion: A Deep Dive into the Financial Impact

Russia has reportedly spent a staggering $167 billion on a full-scale invasion, according to data published by the General Staff of Ukraine’s Armed Forces, as reported by Forbes. The financial impact on Ukraine has been devastating, with an estimated $34 billion worth of Russian equipment destroyed as of August 24. These costs are exclusive of Russia’s defense spending unrelated to the war and the economic losses it suffered due to international sanctions.

Breaking Down the Expenses

A significant chunk of the expenditure has gone towards army supplies, costing Russia about $51.3 billion. Military salaries amount to $35.1 billion, while compensation to the families of the fallen soldiers takes up another $21 billion. The depreciation of the ruble against foreign currency has resulted in a significant reduction in per-soldier budget expenses, which have dropped from $200 per day to $120 per day.

Oil and Gas Revenue vs. Soaring Expenses

The Russian budget is primarily sustained by oil and gas revenues. Despite the ongoing conflict, Russia continues to supply hydrocarbons to other countries, including EU member states. However, Forbes cites Reuters data suggesting that these revenues may not be sufficient to offset escalating expenses.

Surpassing the Defense Budget

In an alarming statistic, Russia spent nearly 5.6 trillion rubles on defense in the first half of 2023 alone, exceeding its entire planned 2023 federal defense budget. As a result, Moscow had to double the defense budget to nearly 10 trillion rubles ($105 billion), accounting for a third of the entire budget for 2023.

Key Takeaways

The invasion’s high cost highlights the immense financial strain that a prolonged conflict can inflict on a country’s economy. Despite the significant income from oil and gas exports, Russia is grappling with a financial crunch worsened by international sanctions. The need to double the defense budget is a clear indicator of the situation’s severity. This scenario underscores the importance of diplomatic solutions over military aggression, given the profound and far-reaching economic implications of warfare.