RAND researchers estimated the costs Russia is incurring as a result of its invasion of Ukraine: As of September 2022, military costs reached $40 billion, full-year 2022 gross domestic product losses amounted to between $81 billion and $104 billion, and direct military spending may amount to $132 billion through 2024. However, researchers also found that Russia can afford to sustain these costs for the next several years.

The Cost of the Ukraine War for Russia

Howard J. Shatz, Clint Reach

ResearchPublished Dec 18, 2023

In this report, RAND researchers present estimates of what costs Russia is incurring as a result of its invasion of Ukraine. As of September 2022, researchers estimated military costs reached $40 billion. Full-year 2022 gross domestic product losses amounted to between $81 billion and $104 billion and full-year financial capital destruction reached $322 billion. Direct military spending may amount to almost $132 billion through 2024. Over the long term, even with a stalemated war, Russia's economy and the standard of living of its people are likely to decline. The main factor sustaining Russia's economy is the export revenue it earns from oil and gas sales. Despite these significant economic losses, RAND researchers judged these costs to be sustainable for the next several years.

Key Findings

Russia has incurred direct military costs, gross domestic product losses, and financial capital destruction and stood to face a decline in the standard of living of its citizens

  • As of September 2022, the direct military costs of the war might have reached $40 billion, or 84 percent of 2021 national defense spending. Of this $40 billion, operations and compensation amounted to $29 billion. Materiel amounted to $11 billion. Direct costs through 2024 were expected to amount to almost $132 billion.
  • For all of 2022, gross domestic product losses amounted to between $81 billion and $104 billion. However, growth returned by the second quarter of 2023.
  • Russia experienced $322 billion in financial capital destruction in 2022, as measured by the market value of companies on the Moscow Stock Exchange, but the market has revived in 2023.
  • Russia can sustain these costs for at least several years. However, over the long term, even with a stalemated war, Russia's economy and the standard of living of its people are likely to decline.

Order a Print Copy

Format
Paperback
Page count
82 pages
List Price
$30.00
Buy link
Add to Cart

Topics

Document Details

  • Copyright: RAND Corporation
  • Availability: Available
  • Year: 2023
  • Print Format: Paperback
  • Paperback Pages: 82
  • Paperback Price: $30.00
  • Paperback ISBN/EAN: 1-9774-1268-8
  • DOI: https://doi.org/10.7249/RRA2421-1
  • Document Number: RR-A2421-1

Citation

RAND Style Manual
Shatz, Howard J. and Clint Reach, The Cost of the Ukraine War for Russia, RAND Corporation, RR-A2421-1, 2023. As of September 11, 2024: https://www.rand.org/pubs/research_reports/RRA2421-1.html
Chicago Manual of Style
Shatz, Howard J. and Clint Reach, The Cost of the Ukraine War for Russia. Santa Monica, CA: RAND Corporation, 2023. https://www.rand.org/pubs/research_reports/RRA2421-1.html. Also available in print form.
BibTeX RIS

Research conducted by

The research described in this report was prepared for the Department of the Air Force and conducted within the Strategy and Doctrine Program of RAND Project AIR FORCE.

This publication is part of the RAND research report series. Research reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND research reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.