Putin faces humiliation as Russia’s war chest ‘coming to an end’

Ukraine MP says Russia are moving ‘slowly and steady’

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The Russian army has made progress in various parts of the battlefield in recent weeks, but Ukraine continues to fight back in the east of the country. Moscow’s forces have focused on the Donbas region in the east and some parts of southern Ukraine. Severodonetsk, a key city in the Luhansk Oblast, could be “cut off” by Russian troops, according to a regional governor. Ukraine’s President Volodymyr Zelensky said yesterday that troops were fighting for “literally every metre”.

Russia’s most recent invasion — the first being in 2014 with its annexation of the Crimean peninsula — has been ongoing for over 100 days, with both Kyiv and Moscow accruing huge financial costs.

Last week, it was claimed that Russia’s war chest could soon be empty as the country splurges a huge €900million a day (£772million) on its military efforts.

Deutsche Welle, the German state broadcaster, reported the figures, suggesting that every missile fired is costing Russia around €1million (£857,000), with each tank said to cost the same.

Russia’s sunken Moskva warship alone cost Moscow €700million (£600million).

While Vladimir Putin is able to source funding via the sales of oil and gas, military analyst Frank Ledwidge said the Russian war chest could soon “come to and end”.

He said: “At the outset of the war, Russia had a war chest they had saved, about $600billion (£492million).

“They will be coming to the end of that quite soon, and as many are aware, there are fears of a default in the Russian economy, that’s not just because of the capital outlay.

“Ukraine spends something in the region of, in capital outlay alone, about $10billion a month (£8.2billion).

“This is a hugely expensive war and that’s before we get to reconstruction or indeed the longer term costs which will be much, much greater.”

Mr Ledwidge also outlined just how much damage has been done to the Ukrainian economy.

He continued: “For Ukraine, we’ve got costs accrued so far of between $200billion – $300billion (£164billion – £246billion) in infrastructure damage.

“Infrastructure damage to Russia so far is a couple of oil refineries and a couple of experimental centres I think.

“This will be epochal for the Ukrainians, but those aren’t the only costs of war. There are the personnel costs, the ongoing difficulties with trade.

“Similarly for Russia, sanctions will begin to bite, although at the moment Europe is still buying its oil and gas.”

In April, it was predicted that Ukraine’s economy would shrink by 45 percent in 2022.

Anna Bjerde, World Bank Vice President for the Europe and Central Asia region, also gave her analysis.

She said: “The magnitude of the humanitarian crisis unleashed by the war is staggering.

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“The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure.

“Ukraine needs massive financial support immediately as it struggles to keep its economy going and the government running to support Ukrainian citizens who are suffering and coping with an extreme situation.”

Meanwhile, in Russia, the economy is shrinking, but appears to be faring better than many anticipated despite the sanctions.

As reported by The Economist last week, predictions of a 15 percent decline in GDP are now looking to be overly negative.

This may be because Europe has not ended its oil and gas partnership with Russia.

In the first 100 days of the war, Germany spent more than €12billion (£10billion) for fossil fuels and remained Moscow’s largest client for natural gas, according to analysis carried out by the Centre for Research on Energy and Clean Air, a think tank based in Helsinki, Finland.

The EU has imposed a gradual embargo on Russian oil imports , but critics have said that the bloc needs to act faster.

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