“Ukraine,” U.S. President Donald Trump posted on Truth Social on September 23, “is in a position to fight and WIN all of Ukraine back.”
He came to this completely revised conclusion apparently having been briefed on battlefield and economic conditions by U.S. officials, including Special Envoy for Ukraine Keith Kellog and Mike Waltz, who served very briefly as Trump’s National Security Advisor and is now the U.S. Ambassador to the UN. Coming out of those briefings, Trump was now convinced that Russia is “in BIG Economic trouble” and that “Russia has been fighting aimlessly for three and a half years a War that should have taken a Real Military Power less than a week to win.” His advisors stressed that Russia had not made significant territorial gains despite large-scale summer offensives.
After the revision in Trump’s assessment, Ukraine’s President Volodymyr Zelensky said that Trump now “clearly understands the situation and is well-informed about all aspects of this war.” But does he?
Trump now apparently thinks that Putin is vulnerable because Russia is in economic trouble, although it isn’t exactly clear what trouble Russia is in. The Russian government and central bank are certainly having to walk something of an economic tightrope, trying to lower inflation while not pushing the economy towards some sort of recession. Interest rates remain high, with the Russian Central Bank’s key rate at 17%, impacting consumer spending and investment. Inflation has, however, dropped to much more manageable levels than earlier in the war, and indeed than earlier this year. Where inflation is now around 8%, it has been as high as just under 18% back in early 2022, still topping 10% earlier this year.
While Russian government plans to increase VAT to help fund the war may contribute to modest increases in inflation, the Russian Central Bank still expects inflation to be down to 6-7% by the end of the year. Lower inflation should allow for the cutting of interest rates. If all of this data was from a Western country it would be seen as positive, but there seems to be a determination on the part of some Western governments and observers to try to put a negative spin on any economic news out of Russia – regardless of what the news is.
Russia has weathered the harshest sanctions regime the West could muster. Russia has the fourth largest economy in the world when measured by purchasing-power parity, which is an assessment of the size of an economy adjusted for the cost of goods and services within it, and is a key measure used by the World Bank. Russia’s GDP growth continues to be more than respectable – currently still expected to be above 1% for 2025 even according to conservative figures. For the first time since the war began, the 2026 budget actually cuts military spending. Russia will officially spend 5.8% of GDP on defense spending. In comparison, Ukraine spends 34.48% of GDP on the military, the largest military burden in the world.
Russia may be facing some economic challenges, but Ukraine is undoubtedly in big trouble and is living hand to mouth. Ukraine has been, for some time, on the verge of economic collapse – and the IMF recently revealed that the situation is far worse than projected. Ukraine has received $145 billion in international aid since the war began, and they have a massive budget deficit they cannot pay. At this point the Ukrainian economy is essentially dependent on foreign assistance. While for the time being the EU currently seems content to carry on bailing Ukraine out, for how long that will last and whether it will be sufficient to keep Ukraine afloat remains to be seen.
The same negative trend for Ukraine is apparent not just for the money to fund the war, but for the troops to fight it. Even if Ukraine had all the money and weapons it needs to equip the war, it is running out of soldiers to fight it. By far the most serious shortage Ukraine is facing is manpower. Millions have left the country, hundreds of thousands have avoided the draft, and, worst of all, hundreds of thousands have been killed or seriously injured. Already by the end of 2023, a close aid to Zelensky had complained that, even if Ukraine had all the weapons they needed, they “don’t have the men to use them.” Two years later, the situation is very much worse.
Hellbound and Down 