He has ranted and raved. And just like that, he  gave the game away. Even Putin admits it – it’s  

over for Russia. Something big is breaking in the  country right now, as the brutal statistics show  

us that Russia isn’t going to recover for 100  years. The Russian economy is down the toilet.  

The levels of cope on display are pathetic. And  the worst of it is that not even the end of the  

Ukraine war is going to be enough to save Russia  from the financial abyss into which its leader  

has led the country. Vladimir Putin has just  revealed what the Kremlin has been trying to  

hide for years. And he did it in the most Putin  way possible – by pointing out a “problem,” and  

then acting as though he had nothing to do with  it. “Statistics show that economic growth has,  

unfortunately, been declining for two months in  a row. Overall, GDP contracted by 1.8% between  

January and February,” Putin announced during  a meeting on economic issues, per Interfax.  

Russia’s president added, “Manufacturing  and industrial production in general,  

as well as such a systemically important sector  as construction, suffered losses.” Finally,  

Putin has acknowledged the impact that the war he  started is having on his country. Granted, he only  

acknowledged the first two months of 2026. Putin  was oddly quiet about the fact that Russia’s GDP,  

or gross domestic product, grew only 1% in 2025  after two years of growth that exceeded 4% and, in  

2024’s case, came close to 5%. But baby steps are  still steps, even if Putin is making admissions  

via omission. After all, GDP contraction is the  result of the war economy that Putin has created,  

and we’re going to be explaining all of the  effects that particular Putin decision is having  

on Russia in a few minutes. First, the headline  stats. The 1.8% contraction that Putin mentions  

for January and February means that the Russian  GDP was 1.8% lower than it had been during the  

same months in 2025. Keep what we just told you  about the slow GDP growth of that year in mind,  

and you’ll realize that it is far more damaging  to Russia than it might appear at first glance.  

Russia’s GDP is actively declining, and it isn’t  going to get much better. Ukraine Today reports  

that Russia’s Central Bank has forecast GDP  growth of 1.6% for the first quarter. Hey,  

that’s progress, right? Maybe not, as the Russian  Academy of Sciences says that the first quarter of  

2026 will actually see a year-on-year decline of  1.5%. Somebody is trying to massage the figures.  

Now, why on Earth would Russia’s Central Bank  have a vested interest in appeasing Putin by  

claiming that growth is on the way? We’ll leave  you to ponder that question. Returning to Putin’s  

comments, did he come up with some master plan  for fixing the freefall in Russia’s GDP? Of course  

not. Russia’s President didn’t even acknowledge  that maybe, just maybe, the economic situation  

inside Russia is what it is because he launched an  invasion of Ukraine that has lasted for over four  

years and counting. “I expect to hear detailed  reports today on the current economic situation  

and why the trajectory of macroeconomic indicators  is currently below expectations. Moreover, below  

the expectations of not only experts and analysts,  but also the government's own forecasts and those  

of the Central Bank of Russia,” Putin declared  during the meeting. One can only wonder what  

these reports are going to say. It would take a  very brave Russian economist, or perhaps a Swiftie  

who can’t resist the urge, to say, “You’re  the problem, Putin, it’s you!” Putin may be  

conveniently acting like he has nothing to do with  Russia’s situation, but he has also decided that  

now is the time to act as though there are good  things about Russia’s economy. The cope got very  

real during the meeting, as Putin declared that  experts around him have pointed to the calendar as  

one of the reasons why Russia’s economy contracted  so heavily during the first couple of months of  

2025. “In January of this year, there were two  fewer working days than last year, and in February  

there was one fewer working day,” Putin said. He’s  not wrong. But really, Putin? Losing three working  

days is enough to cause a 1.8% GDP contraction? If  that’s the case, why are other countries growing?  

The U.K., which is hardly in a stellar economic  position itself, recorded 0.1% real GDP growth  

in January and 0.5% growth in February. Not great  figures, sure. But given that the Japan, the U.S.,  

and the Group of Seven nations as a whole are  recording growth in the 0.1 to 0.3% range,  

it aligns with what we’re seeing elsewhere in  the world. Yet, Russia’s economy contracted by  

1.8%. Is Putin trying to claim that other nations  magically had the three extra working days that  

Russia missed out on? Blaming the calendar feels  like a weak excuse, and it certainly isn’t enough  

to explain the numbers that are coming out of  Russia right now. Putin also pointed to Russia’s  

low unemployment rate as another bright spot.  “Currently, unemployment stands at 2.1%. This,  

among other things, indicates that our labor  market is changing, and flexible, platform-based  

forms of employment are developing,” Putin said  during his meeting. A 2.1% unemployment rate is  

certainly impressive. At least, on the surface.  But there are a few problems with Putin’s numbers  

that show not even that low figure is really the  highlight that Putin claims it to be. For one,  

we don’t know how accurate that figure is. In  a January 10 piece, Eurasia Review reported on  

claims made by economist Valentin Katasonov,  who said that the 2.1% figure, or 2.2%,  

as it was in January, doesn’t come close to  capturing the full scale of Russian unemployment.  

The percentage fails to include anybody who hasn’t  registered themselves as unemployed with the  

authorities. It also doesn’t account for those who  are supposed to be employed, but don’t have real  

full-time work because their days are being cut or  their companies are putting them in a standstill  

due to not having enough work for them. Katasonov  says that Russia’s unemployment rate likely  

doubles if these issues are taken into account,  so the rosy picture that Putin is trying to paint  

in that department isn’t what it seems. What else  is new for Russia’s leader? But let’s say that we  

take Putin’s 2.1% unemployment rate figure at face  value. Even if it’s true, this is another case of  

Putin telling on himself. What Putin is trying  to frame as a good thing for Russia’s economy  

is actually a sign that the country has a labor  crisis. Remember, Russia is a country that Ukraine  

claims has suffered over 1.31 million casualties  since Putin launched his invasion. That’s a lot of  

people, mainly men, who have simply disappeared  from Russia’s workforce. And as the American  

Foreign Policy Council notes, Russia entered  Putin’s war facing severe demographic and labor  

crises. For Russia, the most optimistic scenario  for solving these problems is to bring in 550,000  

migrants each year just to stop its population  from shrinking, and that’s before taking the  

war dead into account. Signs of a labor shortage  problem were already starting to become clear in  

2024. The council says that’s the year when the  Russian job site SuperJob reported that 73% of  

the companies in the country were understaffed.  Fast-forward to April 16, and the Moscow Times  

reports that the governor of Russia’s Central  Bank, Elvira Nabiullina, is warning that Russian  

businesses are being forced into raising wages  to compete for staff in a job market that simply  

isn’t providing enough options. Those higher  wages are increasing production costs for these  

businesses, which is creating price shocks for  consumers. A lack of workers in Russia is now the  

primary threat to price stability in the country.  So, maybe a 2.1% unemployment rate isn’t as good  

as Putin claims it to be. What it really seems  to signify is that Putin has found no solution  

for a labor shortage problem that has existed  for years. If anything, he’s made that problem  

worse by waging a war that will have cost Russia  millions, of potential workers by the time it’s  

all over. That’s the “good” stuff about Russia’s  economy out of the way, and it certainly isn’t  

looking like any of it is particularly positive,  despite Putin’s spin. But here’s where this gets  

serious – Russia’s real problem is that several  sectors of its economy are in active freefall as  

we speak, and there isn’t much that Putin can do  about it. But before we get into that, this is a  

quick reminder that you’re watching The Military  Show. If you’re getting valuable insight from this  

video, subscribe to the channel so you never miss  our analysis. There are serious economic problems  

inside Russia. We know that you’ve heard that  before, likely on this very channel. But what  

we’re seeing now is the cascading effects of four  years of terrible decisions made by Putin that  

are sending Russia into a financial abyss out of  which it won’t be able to climb. We’ll start with  

business activity. According to Ukraine Today,  which shares information from The Moscow Times,  

the Russian Central Bank’s enterprise monitoring  has revealed that business activity growth is on  

the decline in Russia. Using its Business Climate  Indicator, or BCI, for which any number above 0 is  

a sign of growth, and any number below a sign  of decline, Russia went from a BCI of 0.2 in  

January to -0.1 in February. At the very best, we  could call that stagnant, and it only gets worse  

from there. The Central Bank has also recorded  a sharp decline in business revenues across most  

of Russia’s industries for the first quarter of  2026, and that decline has been getting worse with  

each passing month of the year. The New Voice  of Ukraine has more statistics that highlight  

the scale of Russia’s industry-related problems.  Construction, which has long been a linchpin of  

Russia’s domestic economy, saw output fall 16%  year-on-year in January. February saw a further  

decline of 14%, which is likely the result of  investment in fixed capital having fallen by 5.3%  

during the fourth quarter of 2025. Manufacturing  output in Russia fell by 2.9% year-on-year during  

the first two months of 2026. Russia’s cargo  turnover of commercial transport dropped off  

a cliff in February, falling to 430.3 billion  ton-kilometers, which is the lowest that it’s been  

since 2020, which was the height of the COVID-19  pandemic. Retail trade in Russia is stagnant, too,  

and wage growth is starting to slow down. It  was at 8% in February, compared to 13.5% for  

the whole of 2025. What all of this tells us is  that Russia’s businesses are struggling. Already  

dealing with a massive labor shortage, they’re  now losing money hand over fist, which means  

they can’t even offer the higher wages that they  could in the past. We’re starting to see desperate  

measures being put into place to account for all  of this. Several factories in Russia are moving  

to three-day workweeks, United24 Media reported  on March 30. Among them is IZ-KARTEX, which is  

a mining excavator plant that has already put 38%  of its staff on reduced hours. In Leningrad alone,  

the outlet says, eight enterprises have had  to stop production altogether, with another 16  

cutting their schedules. The Russian auto sector  is also dealing with these sorts of problems.  

AvtoVAZ and KAMAZ, which are Russia’s two largest  vehicle manufacturers, have had to halt production  

and cut working hours, respectively. KAMAZ has  gone down to a four-day workweek, mirroring a  

move it pulled in the summer of 2025 as sales  of Russian vehicles collapse. Back in November,  

the Russian tank manufacturer Uralvagonzavod  announced mass layoffs that saw the number of  

employees in some of its units decline by 50%.  These aren’t the kinds of moves that healthy  

businesses make. They’re the moves that businesses  start making when they aren’t receiving the orders  

that they need to stay solvent as they head toward  inevitable collapse. And on an even wider level,  

these business issues are having an impact on  Russia’s federal budget. Russia has been taxing  

its non-oil and gas companies into oblivion.  Value-added tax has been increased, as have  

excise taxes and several other taxes. Despite  all of this, Russia only managed to pull in about  

7% more revenue from its non-energy-related  businesses during the first quarter of 2026,  

and this was as expenditures for the Russian  federal budget jumped up by 17%. The result:  

A 4.58 trillion ruble, or $60 billion, budget  deficit at a time when Russia is spending  

hundreds of billions of dollars on fighting the  war in Ukraine. We just mentioned oil and gas.  

Energy is the cornerstone of Russia’s economy.  The Oxford Institute for Energy Studies says  

that the taxation on revenue created by Russia’s  oil and gas companies typically makes up between  

30% and 50% of federal budget revenues, with the  energy industry as a whole accounting for 20%  

of Russia’s GDP. The conclusion we can draw from  these percentages is that a strong energy sector  

typically means good economic conditions inside  Russia. But a weak energy sector… Now that’s a  

problem. And it’s another problem that is being  reported by Russia itself. In an April 8 press  

release, Russia’s Ministry of Finance reported  that federal budget revenues for the first quarter  

of 2026 were 8.2% lower than they were during the  same period in 2025. The 7.1% increase generated  

from taxing non-energy businesses ended up being  nowhere near enough to make up for the shortfall  

in oil and gas money, the revenues derived from  which were 45.4% lower than they were in 2025.  

Lower oil prices were blamed for this shortfall,  and the loss of money from energy has also led  

to Russia suspending gold and foreign currency  transactions until July 1. Not even the results of  

Operation Epic Fury are helping Russia as much as  they should be. When the U.S. began its operation  

against Iran, the Iranian regime blockaded the  Strait of Hormuz. The U.S. has since blockaded  

Iranian ports and is working on trying to get  traffic flowing through that vital waterway.  

The problem this has caused relates to the fact  that about 20% of the world’s oil and liquefied  

natural gas flow through the Strait of Hormuz  every year. Blockades mean no oil and gas flow,  

and that has resulted in price shocks all over the  world. Oil prices have been hovering around the  

$100 per barrel mark for much of Operation Epic  Fury, and Russia has been able to take advantage  

of that fact. Even selling at a discount, Russia  has been able to get more for each barrel that its  

shadow fleet transports because there is less oil  coming out of the Gulf region. On April 9, Reuters  

reported that Russia will see revenue from its  main oil tax double to $9 billion in April, all  

due to the situation in the Middle East. That’s  a bright spot for Russia. But it also won’t last.  

If the U.S. and Iran come to any sort of agreement  that leads to the reopening of Hormuz, oil prices  

will drop, and Russia will be right back into a  situation where sanctions and Ukrainian attacks  

on its oil facilities cause oil and gas revenues  to decline. As all of these economic problems  

mount up, the best that Russia can hope for is  short-term boosts caused by situations that are  

outside of its direct control. As soon as those  situations are resolved, Russia is right back  

into a problem zone. CMASF, which is a Russian  think-tank, notes that the oil situation right  

now is basically a band-aid placed over a gaping  wound. Even as it raised its forecast for the  

export price of Urals crude to $81.6 per barrel,  it says that this would only accelerate Russia’s  

economic growth for 2026 by 0.5%, and that  growth wouldn’t exceed 1.3% in total. And that’s  

an optimistic scenario for Russia, given that  all signs right now are pointing to 2026 being  

the year when Russia enters a recession. Putin is  calling for solutions. That isn’t much good when  

it’s Putin himself who lies at the root of all of  this. Interest rates inside Russia remain high,  

and the Central Bank says it isn’t going to be  lowering them to any significant degree any time  

soon. Investment into Russian businesses fell  2.3% in 2025, and Russia’s Ministry of Economic  

Development believes another decline is coming in  2026. Plus, the only investments that are being  

made into Russia’s companies are coming from  those companies themselves. Now, what do you  

think happens when those businesses aren’t making  profits? They invest less, which means they don’t  

grow, resulting in yet more struggles for the  Russian economy. There is no offset coming for  

Russia. No acceleration that will lead to economic  recovery. All that Putin has created is a mountain  

of issues that has put Russia into a death spiral.  And the only way for Russia to stand any chance at  

all of escaping that spiral is to do the one thing  that Putin will never do: End the Ukraine war. But  

not even that is likely to save Russia at this  point. In an opinion piece for The Moscow Times,  

Vasily Burov, who is the Director of the Estonto  Lab consulting firm, and Andrei Yakovlev, who is  

an associate researcher at Harvard University’s  Davis Center, note that Russia’s economic problems  

started long before Putin launched his invasion.  “Russia chose guns over butter long before 2022,”  

the duo writes, as it notes that Putin has spent  years concentrating Russia’s power and resources  

among regional elites, Kremlin cronies, and big  businesses. That means there wasn’t much left  

for the little guys to scrap over even before  the Ukraine war started, and there is even less  

now. Russia has chronically underinvested in  social services and infrastructure. There is a  

war inside Russia itself, as the centralization  of Russia’s wealth leads to poverty in regions  

outside of Moscow, which Burov and Yakovlev say is  a purposeful decision now because it gives Putin  

a wellspring of recruits for his army. But the  reality is that the disparities that have been  

thrown into a harsh spotlight since Putin invaded  Ukraine have existed and accumulated for years.  

They won’t go away because the Ukraine war ends.  This is Putin’s entire system – concentrate all  

wealth at the top and leave the rest of Russia to  burn. Any trust that entrepreneurs might have had  

in the Russian state disappeared long ago. If  anything, the end of the Ukraine war would only  

solidify the status quo that Putin has created.  A tyrannical madman concerned only with enriching  

himself as his country burns is not the man to  look to for solutions to the economic problems  

that he caused. There is no hope left for Russia.  Just a cascading drop into an ever-worsening  

economic situation. Even if the Ukraine war  ends, all of the problems we’ve highlighted  

will remain. And as long as Putin and his buddies  are getting richer, they’ll have no incentive to  

make anything better for the rest of the country.  So, what is the ultimate solution that Putin has  

called on his country’s economists to come up  with? They’ll never tell him, but it’s getting  

rid of Putin himself. That won’t happen, and it  means that Russia won’t even be able to show signs  

of recovery until Putin dies. There’s plenty  of panic inside the Kremlin about all of this.  

And there’s also plenty of panic about how badly  Russia is failing on the frontlines in Ukraine. As  

Putin retreats deeper into delusional isolation,  Ukraine’s strategy is exposing vulnerabilities in  

Russia’s military that are causing some inside the  Kremlin to ring alarm bells. Find out more about  

that in our video. And if you enjoyed this video,  make sure that you subscribe to The Military Show  

to keep up with our coverage of Putin’s war  and the impact that it’s having on Russia.