Russian President Vladimir Putin appears increasingly concerned about the country's economy as U.S. President Donald Trump calls for an end to the war in Ukraine, Reuters reported on Jan. 23, citing five undisclosed sources.
Throughout the nearly three years of full-scale invasion, Ukraine's Western partners imposed heavy sanctions on Moscow to undermine its ability to wage war. Initially, Russia has largely weather the sanctions, circumventing economic restrictions through third-party countries and various loopholes.
The situation appears to be shifting as Russia has faced mounting economic challenges over the past months, compounded by labor shortages and military spending-induced inflation that led to record interest rates.
Putin insisted that Russia would continue to fight as long as necessary and would not compromise its interests. At the same time, the Russian president acknowledged the pressure on the economy caused by the war, Reuters reported, citing its undisclosed source.
Putin was also dissatisfied with the decline in private investment due to the high cost of credit. During a meeting with Russian business leaders in December, the president chided the economic bloc's top officials, according to two sources.
In 2025, Russia has increased defense spending to a post-Soviet record level of 6.3% of GDP, which is one-third of budget expenditures, causing inflation.
The economic situation in Russia has pushed some of the Russian elite to seek a negotiated settlement to the war, according to two sources familiar with the Kremlin's views.
Trump has yet to present a detailed plan for peace in Ukraine, despite campaigning on promises to put a swift end to the conflict. While he frequently references his good relationship with Putin, his recent comments on Moscow have taken a somewhat harder line.
The U.S. president recently urged Putin to "make a deal" on Ukraine, threatening with "high levels of taxes, tariffs, and sanctions on anything being sold by Russia to the United States and other participating countries" if he fails to do so.
Russia has thus far dismissed any reported peace proposals from the Trump administration and maintained its ambitions to fully occupy four Ukrainian regions —Luhansk, Donetsk, Zaporizhzhia, and Kherson.
Trump has said that arrangements for a face-to-face meeting with Putin are currently underway.
Oleg Sukhov
(Updated: )
