Advertisement

The cost of the Ukraine war for Russia [RAND Research Report]

By Howard J. Shatz, Clint Reach (RAND Corporation)

In this report, RAND researchers present estimates of what costs Russia is incurring as a result of its invasion of Ukraine. As of September 2022, researchers estimated military costs reached $40 billion. Full-year 2022 gross domestic product losses amounted to between $81 billion and $104 billion and full-year financial capital destruction reached $322 billion. Direct military spending may amount to almost $132 billion through 2024. Over the long term, even with a stalemated war, Russia's economy and the standard of living of its people are likely to decline. The main factor sustaining Russia's economy is the export revenue it earns from oil and gas sales. Despite these significant economic losses, RAND researchers judged these costs to be sustainable for the next several years.

 

Key Findings

Russia has incurred direct military costs, gross domestic product losses, and financial capital destruction and stood to face a decline in the standard of living of its citizens. As of September 2022, the direct military costs of the war might have reached $40 billion, or 84 percent of 2021 national defense spending. Of this $40 billion, operations and compensation amounted to $29 billion. Materiel amounted to $11 billion. Direct costs through 2024 were expected to amount to almost $132 billion.

 

In this report, RAND researchers present estimates of what costs Russia is incurring as a result of its invasion of Ukraine. As of September 2022, researchers estimated military costs reached $40 billion. Full-year 2022 gross domestic product losses amounted to between $81 billion and $104 billion and full-year financial capital destruction reached $322 billion. Direct military spending may amount to almost $132 billion through 2024. Over the long term, even with a stalemated war, Russia's economy and the standard of living of its people are likely to decline. The main factor sustaining Russia's economy is the export revenue it earns from oil and gas sales. Despite these significant economic losses, RAND researchers judged these costs to be sustainable for the next several years.

 

For all of 2022, gross domestic product losses amounted to between $81 billion and $104 billion. However, growth returned by the second quarter of 2023.

Russia experienced $322 billion in financial capital destruction in 2022, as measured by the market value of companies on the Moscow Stock Exchange, but the market has revived in 2023.

Russia can sustain these costs for at least several years. However, over the long term, even with a stalemated war, Russia’s economy and the standard of living of its people are likely to decline.

 

Read the report on the RAND Corporation website.

 

Tags:

Advertisement

Advertisement

Advertisement

Related news & articles

Advertisement

Advertisement

Latest news

Advertisement

Advertisement

Featured

Advertisement