Putin's Grip Tightens as Russia Faces Economic Strains from Ukraine War

Russia's parliamentary election has handed Vladimir Putin his largest majority ever in the State Duma, with United Russia now controlling 349 of the 450 seats. The Kremlin's grip on power has been strengthened, but this comes at a time when Russia is facing significant economic challenges. Despite the war against Ukraine draining resources, Moscow expects growth of just 0.6% this year and has seen oil and gas revenues fall by 16.7%. Capital investment is also falling, and interest rates remain high at 14%, while the federal deficit reached 5.8 trillion rubles through August.

However, the Kremlin's coffers are not yet empty, thanks in part to rising oil prices which could add as much as 1 trillion rubles to the National Wealth Fund this year. Military spending is also set to rise by 27% next year to 17.1 trillion rubles, paid for through higher taxes and borrowing.

The election result has made it clear that challenging the Kremlin through the Russian political system is now impossible. Moscow's new budget makes it clear that it intends to continue fighting in Ukraine, at least for now.