Russia's economic resilience is proving to be a mirage, masking a looming fiscal precipice that threatens to upend the nation's stability. Over the last year, its financial prospects have defied expectations, posting a robust 3.6% growth in 2023, and a further 2.4% y-o-y in August. However, beneath this veneer of resilience lies a precarious economic landscape that threatens its long-term prospects. The underlying growth is largely artificial, driven by massive government spending on the military-industrial complex, with the war becoming the primary engine of Russia's economy.

This presents a striking economic paradox, with the conflict simultaneously acting as the country’s greatest hurdle and its primary defender against financial ruin. In essence, the war is acting as both a life support system and a terminal illness for the Russian economy. As the conflict grinds on, the clock is ticking, and the question is not if but when the realities will force a reckoning in the Kremlin.