Two of Russia's most senior economic figures publicly linked the country's mounting economic pressures to the war in Ukraine last week — an unusual departure from the official silence that has surrounded Kremlin war costs since 2022. German Gref, chief executive of Sberbank, and central bank governor Elvira Nabiullina both spoke in separate settings as Ukraine's drone strike campaign against Russian oil infrastructure compounds the fiscal strain from record military spending.
Russia's military and classified spending reached 46% of all budget expenditure in the first quarter of 2026 — a surge of roughly 30% over the same period in 2025 — while the National Wealth Fund buffer has fallen from about 7% of GDP before the war to 1.7% as of April 2026, Russia's Finance Ministry confirmed.
What each of them said
Gref told Sberbank's annual shareholders meeting that investments had already fallen over 14% and could drop a further 3% this year. He then addressed the war directly.
"I don't believe there is anyone in this country whose primary concern is anything other than an end to military hostilities as soon as possible," Gref said.
For the chief executive of Russia's largest state-controlled bank to frame the war as the country's overriding problem — not "the special military operation," not a security challenge to be managed — marks a notable break from the language Kremlin officials have enforced since February 2022.
Nabiullina's public position is more constrained, but the Bank of Russia's own press release on her June rate decision said fiscal policy had become more accommodative than previously expected and that pro-inflationary risks had worsened — the same dynamic that Kluge's analysis traces directly to the gap between military outlays and tax revenues.
The fiscal picture behind the exchange
The 46% military spending figure comes from analyst Janis Kluge of the German Institute for International and Security Affairs, drawn from Finance Ministry data and cited by ISW. Russia is now covering an increasing share of the deficit through borrowing, with liquid National Wealth Fund assets depleted to a fraction of their pre-war level and no longer functioning as a meaningful cushion.
Ukraine's strike campaign is compressing the revenue side simultaneously. Bloomberg counted 38 Ukrainian strikes on Russian refineries from January through May 2026, with 16 in May alone — the highest monthly figure of the war. Two strikes on 16 and 18 June disabled both primary processing units at the Kapotnya refinery in Moscow — the capital's main fuel source — leaving it unable to process crude until at least early 2027.
Russia has responded by banning gasoline and jet fuel exports, drawing down strategic reserves, allowing lower-grade fuel blends, and importing gasoline from India and Belarus, while negotiations with Kazakhstan are complicated by the fact that a Ukrainian strike disrupted the feedstock supply to one potential Kazakh supplier.
Russian President Valdimir Putin publicly admitted queues at filling stations while summoning top officials to manage the crisis. Parliament passed legislation subsidizing gasoline imports from abroad.
