The Conflict in Ukraine Harms the Russian Economy

The Financial Times reported today, Thursday, citing a draft text from the U.S. Treasury Department, that "the conflict in Ukraine significantly impacts the Russian economy, raises domestic prices, and forces Moscow to allocate a third of its budget to defense." The newspaper quoted Rachel Lingas, the chief economist responsible for sanctions at the department, stating that "the Russian economy could have grown by more than five percent if President Vladimir Putin had not launched the war on Ukraine." Lingas added that "the country's performance has been lower compared to other energy exporters, such as the United States." The Financial Times report indicated that "Moscow spends more than $100 billion, or nearly a third of its total expenditures, on defense in 2023."