Image by Vitaly V. Kuzmin
The Western sanctions aimed at changing Russian behavior in Crimea and East Ukraine have hit the Russian economy hard. When combined with the collapse of oil prices over the last few years on international markets, the one-two punch pushed the Russian economy into a recesion. Moscow is just getting back to anemic growth in recent months and struggling to fill deficits annually in the federal budget.
This financial pressure has forced the Kremlin to cut budgets. Social spending has been especially hit with funds reduced for medical care, schools, etc.
Russia has even announced that military spending will be reduced somewhat. However, Russian President Vladimir Putin declared on Monday that the Kremlin’s vaunted military modernization effort will not be slowed.
At a meeting with the State Duma’s United Russia leader, Vladimir Vasilyev, Putin said there would however be “some cuts compared to past [spending],” reports Russian state news agency TASS. Putin still aims to have 70% of the Russian armed forces fitted with modern equipment by 2020.
Russia in 2016 was forced to slash defense spending from 3.9 trillion rubles ($65.4 billion) in 2016, to 2.8 trillion rubles in 2017, and 2.7 trillion rubles next year, reports The Moscow Times.