Story perspectives

Russia Faces Economic Crisis Amid Rising Unemployment and Sanctions

2/24/2026

Summary

Story summary

Western sanctions are intensifying pressure on Russia's economy in 2025, as military expenditures consume 8% of GDP and Transparency International ranks Russia 157th.
Energy revenues fell 20% in 2025, widening the fiscal deficit to 2.5% of GDP.
The government is raising taxes to address revenue shortfalls.
About 250,000 combat veterans are unemployed, raising concerns about social unrest, and more than 8,000 convictions tied to returning soldiers since 2022.

History

Historical Context

Since 2014, Russia has faced significant economic sanctions from the U.S. and EU following its annexation of Crimea, leading to a 3.7% GDP contraction in 2015. The sanctions, coupled with a 30% drop in oil prices, have resulted in a fiscal deficit of 2.5% of GDP today, exacerbating unemployment and threatening long-term economic stability amid ongoing military expenditures.

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Story summary

Western sanctions are intensifying pressure on Russia's economy in 2025, as military expenditures consume 8% of GDP and Transparency International ranks Russia 157th.
Energy revenues fell 20% in 2025, widening the fiscal deficit to 2.5% of GDP.
The government is raising taxes to address revenue shortfalls.
About 250,000 combat veterans are unemployed, raising concerns about social unrest, and more than 8,000 convictions tied to returning soldiers since 2022.

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