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The Russian economy was slowing even before President Trump’s latest threats. But the Kremlin has enough money to keep fighting in Ukraine.
Aug. 8, 2025Updated 5:47 a.m. ET
President Trump is combining diplomatic overtures with economic threats to persuade Russia to end its war in Ukraine. Mr. Trump raised the stakes of his approach this week, when he announced plans to meet President Vladimir V. Putin, on the same day that he said he would punish India for buying Russian oil by doubling U.S. tariffs.
Over the past month, Mr. Trump has repeatedly threatened to cripple Russia’s war economy if Mr. Putin doesn’t agree to a cease-fire, either by imposing new sanctions or by closing off the remaining markets for Russian oil. The Kremlin has so far brushed off Mr. Trump’s ultimatums, saying it intends to push ahead with its latest offensive.
Here’s what we know about Russia’s ability to withstand Mr. Trump’s pressure.
How strong is the Russian economy?
Russia significantly increased state spending after launching its invasion in 2022, engineering an economic boom.
That boom is over.
The country’s economy is expected to grow 1 to 2 percent this year, down from 4.7 percent in 2024.
Oil revenue is falling. Most civilian industries have stopped growing. High interest rates are stifling private investment, and large companies are starting to furlough workers.
“The largest Russian companies are unable to spend money on their development, on building new power plants, building new factories, pipelines, railways,” Dmitri Gusev, a pro-government Russian lawmaker, said a news conference on Tuesday. “The investment programs are shrinking.”
