A telling sign is the Kremlin’s abandonment of all budgetary discipline, as the costs of the war in Ukraine, now in its fifth year, strain existing resources.

Alexandra Prokopenko, who is now a fellow at the Carnegie Russia Eurasia Center, pointed out in a recent Financial Times opinion article that the war forced Russia to end its vaunted fiscal austerity measures.

In a striking example of this turnaround, the Russian Parliament recently gave a blank check to the Finance Ministry to spend more and borrow beyond its debt ceiling, without a formal budget or explicit legislative approval.

Indeed, until May, the budget deficit is already double the level of 2025, reaching 2.6% of GDP, or around $83 billion. At the same time, Russia’s sovereign wealth fund, which has been used to cover budget deficits, is rapidly depleting and is at a fraction of pre-war levels.

“A cornered autocracy rewrites the budget rules as it goes along, excluding parliament from the process, and will not admit dangers it cannot control,” Prokopenko wrote. “It’s less dramatic than a palace coup, but that’s what decline looks like.”

The precipitous deterioration of Russia’s finances coincides with Ukraine’s stunning military successes this year. Advanced drones and new tactics allowed kyiv not to repel attacks by the Russian army, but to repel them and regain territory. Long-range drones are also penetrating deep into Russia, including St. Petersburg and Moscow, targeting refineries and the defense industrial base.

The result has been devastating battlefield losses that now exceed the ability to recruit new recruits, as well as skyrocketing death benefits and widespread fuel shortages across the country.

Meanwhile, the Kremlin has been unable to defend against all Ukrainian drone attacks, forcing companies to spend more than $1 billion of their own money for makeshift protection. But Moscow also refuses to reimburse them.

Putin’s “juggle” has now ended as he can no longer finance his war, contain inflation and continue to grow the economy in one fell swoop, Prokopenko said.

“War is increasingly being paid for by quietly charging the population and suspending the state’s own rules,” she added. “A regime propped up in this way is heading toward a poorer, angrier country, a financial system out of control, and war financing it cannot rely on. The end, when it comes, will come from this kind of decline, one that begins long before anyone names it.”

For now, Putin’s grip on power is secure, but public discontent is growing as average citizens buckle under the pressure of high inflation and high interest rates.

Russia’s fuel shortage has added to the misery, creating long queues outside gas stations, with motorists waiting hours to refuel. Frustration is at its peak and fights break out between people struggling to buy rationed supplies of gasoline.

Sefa Karacan/Anadolu via Getty Images

Additionally, the Russian military’s “meat grinder” tactics in Ukraine, where troops suffer catastrophic losses for almost no gains, are creating a backlash.

In fact, the average life expectancy of a new recruit is about 10 days to three weeks, and once on the battlefield, their survival averages only 20 to 35 minutes, according to Russian military bloggers.

A Russian blogger, a veteran of the war in Ukraine by the name of Alexander Lunin, published a video on Thursday that went viral. He describes the regular torture of soldiers by their own commanders, according to Radio Free Europe.

Lunin also demanded a live meeting with Putin and warned that if it did not take place soon, “the army would turn its guns on the Kremlin.” He added that he was conveying the sentiment of active-duty military and security officials who met with him earlier.

But he returned to the threat of mutiny on Friday, explaining that if the soldiers wanted to rebel, they would do so silently and would not ask him to warn them.

Yet the original video was so widespread that Putin’s spokesperson was asked to comment on the video and said the Kremlin was aware “that such a call exists.”

Peter Frankopan, professor of world history at Oxford University, warned in a Foreign policy article that a revolution in Russia is unlikely.

Instead, continuing economic difficulties and disenchantment over the war will convince some factions of the regime “that it is time for a fresh start,” he said, adding that “the fissures of today may become the fissures of tomorrow.”

But it could also make Putin more dangerous in his struggle to cling to power, increasing the risk of escalation in Ukraine or other parts of Europe.

“Beware of the drowning man: The coming months are likely to be dangerous both outside and inside Russia as Putin desperately tries to stay afloat,” Frankopan warned.