Russia's economy has entered what economist Alexandra Prokopenko terms the "death zone"—a state where the country is "metabolising its own muscle tissue" to sustain a war machine that is simultaneously destroying productive capacity and foreclosing future growth.
Writing in The Economist, Prokopenko—a former Russian Central Bank official now at the Carnegie Russia Eurasia Center—argues that Moscow's mobilization economy has reached the point of cannibalization. The metaphor is apt: like a climber too high on Everest to survive without supplemental oxygen, Russia's economy consumes critical resources faster than it can regenerate them.
To understand today's headlines, we must look at yesterday's decisions. When President Vladimir Putin launched the full-scale invasion of Ukraine in February 2022, Russian officials projected a swift victory requiring minimal economic disruption. Nearly three years later, Russia has mobilized its economy for total war—diverting over 40 percent of government spending to defense and security, conscripting workers from productive sectors into military production, and depleting capital reserves accumulated during high oil-price years.
The economic indicators paint a grim picture. Russia's workforce has contracted by approximately 5 million workers since 2022—lost to military mobilization, emigration, and battlefield casualties. The labor shortage has become acute across critical sectors: manufacturing, logistics, information technology, and skilled trades. Businesses report offering wage premiums of 30-50 percent to attract workers, fueling inflation that the Central Bank struggles to contain despite interest rates exceeding 20 percent.
Prokopenko's central argument is that Russia is consuming productive assets to sustain current military operations without building capacity for future recovery. Defense factories run triple shifts producing artillery shells and armored vehicles—production that generates GDP growth in nominal terms but creates no lasting economic value. Meanwhile, civilian manufacturing deteriorates, infrastructure crumbles, and research funding evaporates. The economy grows on paper while its foundation erodes.
The "muscle tissue" metaphor captures this dynamic. A starving body metabolizes muscle to survive, weakening itself further and accelerating decline. Russia liquidates foreign currency reserves, raids pension funds, and defers maintenance on civilian infrastructure to finance immediate military needs. Each decision buys another month of war at the cost of years of future prosperity.
Oil export revenues—traditionally Russia's economic lifeline—remain constrained by Western sanctions and price caps. Moscow has successfully redirected exports toward China, India, and other non-Western buyers, but at discounted prices that reduce government revenue. The Kremlin projects budget deficits exceeding 2 percent of GDP through 2026, with defense spending consuming resources that would otherwise fund education, healthcare, and economic modernization.
Inflation presents another crisis. Consumer prices rose 8.9 percent in 2025, well above the Central Bank's 4 percent target. Defense spending injects money into the economy while production capacity shrinks, creating classic conditions for sustained inflation. The Central Bank raised interest rates to 23 percent in December, making business investment prohibitively expensive and threatening to trigger recession.
The strategic implications are profound. If Prokopenko's analysis is correct, Russia faces a closing window for achieving military objectives in Ukraine before economic collapse forces retrenchment. This may explain intensified Russian offensives in recent months—Moscow attempting to secure territorial gains while it still possesses military capacity, before economic reality imposes a ceasefire on unfavorable terms.
Western policymakers are watching these dynamics carefully. If economic pressure forces Russia to halt operations, sanctions will have achieved their strategic objective: denying Moscow the resources to sustain aggression. However, economic desperation also creates risks of escalation—a cornered Russia might resort to more extreme measures to achieve breakthrough rather than accept defeat.
The demographic crisis compounds economic pressures. Russia's population was declining before the war; military casualties and emigration have accelerated the collapse. Independent analysts estimate Russian military deaths between 100,000 and 200,000, with several hundred thousand wounded. An additional one million working-age Russians emigrated to avoid mobilization. The loss of young, educated workers will reverberate through the economy for decades.
For ordinary Russians, the economic pain is increasingly visible. Shortages of imported goods persist despite efforts to source alternatives. Construction projects halt as workers deploy to defense factories or the front lines. Regional budgets face austerity as federal transfers decline. The social contract that sustained Putin's regime—political passivity in exchange for rising living standards—frays as living standards decline.
Prokopenko offers no optimistic scenarios. She argues Russia has entered a trap of its own making: unable to achieve military victory without further economic sacrifice, yet unable to end the war without admitting defeat. The longer the conflict continues, the deeper the economic hole becomes, yet ending it requires accepting losses that would threaten regime survival.
The "death zone" metaphor implies an eventual reckoning. Climbers in Everest's death zone must descend or perish; there is no sustainable equilibrium at extreme altitude. Similarly, Russia cannot indefinitely maintain current mobilization levels. The question is whether Moscow recognizes this reality before economic collapse or military defeat forces the decision.
Western officials debate how to respond. Some argue for intensifying sanctions to accelerate Russian economic decline, hastening the end of the war. Others caution that excessive pressure could trigger dangerous escalation or state collapse with unpredictable consequences. The balance between coercion and restraint will shape the conflict's trajectory in coming months.
As I've covered Russia for over a decade, the current moment feels historically significant. Moscow has survived previous economic crises through a combination of resource wealth, authoritarian control, and public resilience. The difference now is the simultaneity of challenges: economic decline, military attrition, demographic collapse, and international isolation. Whether the regime can navigate these compounding pressures while continuing the war remains the central question of this conflict—a question that Prokopenko's analysis suggests has increasingly dire answers.
