According to The Spectator, the military economy of the Russian Federation, engineered by Putin, remains under sanctions, and its collapse may be imminent, contingent upon actions taken by the West.

The article highlights China's growing dominance as Russia's primary trade partner and technology supplier since 2022, potentially surpassing the EU. Increased military spending has stimulated overall economic growth within Russia. Direct military expenditures as a percentage of GDP surged from 2.7% in 2021 to 6% in 2024.

However, this growth is fueled by government spending on military production, which drives consumer spending and tax revenues. Yet, the funding primarily stems from the export of oil and raw materials. Although the West initially attempted to curtail Russia's export revenues while maintaining the oil flow to Western markets, these efforts have been insufficient.

Russia has successfully redirected its sales to Asia, particularly to India and China, compensating for the loss in European markets. Nonetheless, this shift has resulted in increased costs and complexities in equipment procurement.

The high demand for labor and limited access to Western technologies have led to a decline in labor productivity by 3.6% in 2022, alongside reduced capital investments by companies, anticipating lower profits and higher taxes.

The article concludes that a potential drop in oil prices or further increases in sales costs may diminish state revenues and subsequently military expenditures, ultimately leading to the collapse of the military-driven economic model.