Russian President Vladimir Putin announced on February 24 this year that a "special military operation" had been launched against Ukraine.

(Bloomberg file photo)

The Russian military invaded Ukraine and spent 900 million U.S. dollars a day

[Financial Channel/Comprehensive Report] Russian President Vladimir Putin announced on February 24, 2022, the launch of a "special military operation" against Ukraine, which has not subsided so far.

The costs brought by both sides of this conflict are not small, not only in terms of personnel, equipment operations, ammunition consumption, etc., but also that the war will inevitably impact the balance of supply and demand in the global market, which will also affect oil prices, food, trade, and supply chains.

Since the beginning of the conflict between Russia and Ukraine, European and American countries have imposed economic sanctions on Russia one after another. Europe and the United States have imposed multiple energy and financial sanctions on Russia, hoping to bring down the Russian economy in exchange for peace.

However, the war is still stalemate. Russia does not seem to be affected. On the contrary, after Europe began to reduce the use of Russian oil and natural gas, it faced inflation and an energy crisis. rate hike.

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According to the Center for Economic Recovery, a group of economic experts, in the first 23 days of Russia’s invasion of Ukraine alone, Russia’s direct military expenditures reached at least 19.9 billion U.S. dollars. The cost of facilities and hardware equipment is as high as 9 billion US dollars.

Ed Arnold, a European security researcher at the Royal United Services Institute, a British think tank, said: "Continuous military operations are expensive, especially when troops are sent to locations far from where they are stationed. In addition, War requires a lot of ammunition supplies, fuel supplies to mobilize the war machine, and troops need food supplies.”

In war, weapons and military spending are the main expenditures.

(Midland file photo)

Russia's military spending has exceeded $110 billion since the start of the war

In war, weapons and military spending are the main expenditures.

Based on the median price of arms sold by Russia in the past 10 years, the value of these weapons and equipment is about 50 billion US dollars.

Sean Spoonts, editor-in-chief of SOFREP, a military news website, estimates that Russia is spending at least $900 million a day on the war.

The $900 million does not include losses caused by Western economic sanctions, but includes the payment of salaries to Russian troops fighting in Ukraine, giving them weapons, bullets and rockets, and repairing military equipment.

In addition, Russia used thousands of cruise missiles in the war, costing about $1.5 million each.

As the situation continues to deteriorate, Russia's investment in troops and weapons will increase, and direct war expenses will also increase accordingly.

According to Heli Simola, senior economist at Bank of Finland's Emerging Markets Institute, the country's defense spending has increased by at least $53 billion since the start of the war, while Russia's military costs will be at least $110 billion or more.

After the conflict between Russia and Ukraine, the international financial exchange payment mechanism SWIFT organization has excluded some Russian banks (Reuters file photo)

Russia's war funds come from the sale of energy and food

Although Russia's foreign exchange reserves (nearly 600 billion U.S. dollars) are among the highest in the world, most of them are now held in bank accounts in Western countries due to economic sanctions.

So where does Russia's support for the war come from?

Won't the money run out?

Since the start of the fight, the SWIFT organization, the international financial exchange payment mechanism, has excluded some Russian banks. However, because as much as 40% of the EU's natural gas imports from Russia, Russian banks will be completely kicked out of SWIFT, and energy transactions will definitely bear the brunt.

Although SWIFT is the main payment system, it is not the only payment system. Russia also has a payment system, so it can require "unfriendly countries" to pay in rubles when purchasing natural gas.

Russia is a major exporter of bulk commodities such as energy, food, and spare parts. Many countries have been reluctant to agree to comprehensive sanctions against Russia due to their high dependence on Russian imports.

Experts said: "International economic sanctions will be more difficult to implement with the support of Russia's allies." So this also means that Russia's war funds are nothing more than energy, food, parts and other industries.

That's why Russia has the confidence to say that if Western countries set price ceilings on Russian energy, they will cut off energy supplies, and Western countries will be "frozen" like the wolf's tail in a famous Russian fairy tale.

Since the outbreak of the war, the Biden administration has provided Kyiv with $8 billion in security assistance, exceeding the $7.4 billion spent by the United States in the first five years of the war in Afghanistan.

(Bloomberg file photo)

Russia's secret budget of 112 billion U.S. dollars in 2023

The conflict between Russia and Ukraine continues, and the expenditures of Russia and Ukraine can be said to be quite astonishing. Not only that, but the amount of aid from European and American countries is also quite high.

Take the United States as an example. In May, President Joe Biden signed an agreement to provide nearly $40 billion in aid to Ukraine.

The total amount of aid that the United States agreed to in Ukraine after Russia invaded Ukraine has far exceeded $50 billion.

How long this conflict will last is unknown.

Russia announced that its defense budget for 2023 will be about $84 billion, which is more than 40% higher than the 2023 defense budget first announced in 2021.

In addition, in next year's general budget, Russia also includes about 112 billion US dollars of confidential or unspecified funds, just near the end of the year, which is interpreted as being used to increase the budget for the war that will continue next year.

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