Russian president vladimir putin biography

Russian President Vladimir Putin has acknowledged the toll that the full-scale invasion of Ukraine is having on his economy, and is perhaps more willing to consider his war goals accomplished.

As the war approaches its fourth year, members of the Russian elite are increasingly hoping that a settlement can be reached in the conflict, Reuters reported on Thursday, citing unnamed Kremlin sources familiar with the matter.

Newsweek has contacted the Kremlin for comment by email.

Why It Matters

U.S. President Donald Trump issued an ultimatum to his Russian counterpart, threatening fresh tariffs if Russia doesn't swiftly end the Ukraine war. This would further strain the Russian economy, which first took a hit in February 2022 when the war began. The latest report from Reuters suggests Putin is worried about such measures from Washington, despite messaging from the Kremlin that the country isn't surprised by Trump's latest remarks.

What To Know

When the war began, Russia was hit with more than 13,000 restrictions and became the world's most-sanctioned country, according to the Carnegie Endowment for International Peace. Russia was kicked out of the SWIFT global banking system, while Western nations froze Russia's access to some of its foreign reserves. Europe also froze purchases of Russian oil and gas.

The economy has also suffered amid an increase in military spending. Russia's military spending has quadrupled since the the war in Ukraine began, and the total money spent so far may be significantly higher than the officially reported figures, according to Craig Kennedy, a former Morgan Stanley investment banker who spoke to Newsweek.

Nearly three years on, Russia faces a severe labor shortage, and its inflation rate is at 9.5 percent—up from 7.4 percent in 2023. Food has become more expensive, while gasoline, housing, and utilities costs have soared. The Russian Central Bank is also unable to raise interest rates to tame inflation, a report from the Yale School of Management published this month notes.

Putin has acknowledged that the war has strained the Russian economy and that it has created "really big problems" with high interest rates affecting nonwar-related businesses, one Kremlin source said.

Putin has grown frustrated and even told off senior economic officials in a meeting at the Kremlin last month, two sources said.

The Russian president now believes he has accomplished his key war goals—controlling nearly a fifth of Ukraine and weakening the Ukrainian Armed Forces—a source said.

Trump, who entered office for a second term on January 20, threatened Putin with tariffs and sanctions if he refuses to negotiate an end to the "ridiculous" war.

The Kremlin responded on Thursday, saying Russia saw nothing particularly new in Trump's ultimatum.

What People Are Saying

President Donald Trump said on Truth Social on Wednesday: "I'm not looking to hurt Russia. I love the Russian people, and always had a very good relationship with President Putin—and this despite the Radical Left's Russia, Russia, Russia HOAX. We must never forget that Russia helped us win the Second World War, losing almost 60,000,000 lives in the process. All of that being said, I'm going to do Russia, whose Economy is failing, and President Putin, a very big FAVOR.

"Settle now, and STOP this ridiculous War! IT'S ONLY GOING TO GET WORSE. If we don't make a 'deal,' and soon, I have no other choice but to put high levels of Taxes, Tariffs, and Sanctions on anything being sold by Russia to the United States, and various other participating countries. Let's get this war, which never would have started if I were President, over with! We can do it the easy way, or the hard way—and the easy way is always better. It's time to 'MAKE A DEAL.' NO MORE LIVES SHOULD BE LOST!!!"

Kremlin spokesman Dmitry Peskov told reporters on Thursday: "We do not see any particularly new elements here. He likes these methods; at least he liked them during his first presidency.

"We carefully record all the nuances. We remain ready for dialogue, President Putin has repeatedly spoken about this—for equal dialogue, for mutually respectful dialogue."

NATO's Secretary-General Mark Rutte told CNBC in Davos, Switzerland: "I was very, very happy with the position of Trump to put more sanctions on Russia. We know that the Russian economy is doing terribly bad[ly], and the sanctions will help."

What Happens Next?

Trump is expected to soon hold talks with his Russian counterpart. Keith Kellogg, the president's pick for special Ukraine peace envoy, has also said he will visit Ukraine.