Russia Slows, Struggles to Supply the War Effort


Figure 1: In March, production dropped in almost all of Russia’s central industries. Sources: CEIC, Rosstat and BOFIT.

From the article (translated via Google.Translate):

In March (seasonally adjusted), production declined slightly in almost all key industries compared to the previous month. Annually, production continued to grow in most industries, but more slowly than before.

Also in the processing industry, annual production growth slowed to 6 percent in March. However, the processing industry was the only one of the key industries where production also increased on a monthly basis (seasonally adjusted). The growth of the processing industry has continued to be driven especially by industries related to the war. In the beginning of the year, their production has seen another growth spurt after slowing down at the end of last year. The role of war-related industries in Russia’s recent economic development has also been examined in a recent BOFIT blog.

Despite the economy being on a war footing, production seems unable to keep up with battlefield losses. From ISW today:

Recent satellite imagery of depleted Russian military vehicle and weapon storage facilities further indicates that Russia is currently sustaining its war effort largely by pulling from storage rather than by manufacturing new vehicles and certain weapons at scale. Newsweek reported on May 8 that a social media source tracking Russian military depots stated that satellite imagery indicates that Russia’s vehicle stores have significantly decreased from pre-war levels by nearly 32 percent from 15,152 in 2021 to 10,389 as of May 2024.[11] The military depot tracker noted that Russia has pulled most from its stores of MT-LB multipurpose armored fighting vehicles (AFVs), which are down from 2,527 prewar to 922 remaining; BMD airborne amphibious tracked infantry fighting vehicles (IFVs), which are down from 637 prewar to 244 remaining; and BTR-50 armored personnel carriers (APCs), down from 125 prewar to 52 remaining. The military depot tracker noted that Russia no longer has newer model BTR-60s, 70s, and 80s in storage and that only 2,605 remain — likely referring to vehicles currently fielded — from its prewar stocks of 3,313. The military depot tracker noted that Russia is currently fielding 1,000–2,000 of its remaining MT-LBs in Ukraine. Another open-source account on X (formerly Twitter) cited satellite imagery dated May 27, 2020 and March 26, 2024 and concluded that Russia has pulled roughly 60 percent of its artillery systems at an unspecified towed artillery storage base, reportedly one of Russia’s largest.[12] The source reported that about half of the remaining artillery systems at this base are likely unusable due to degradation while in storage and because many of the remaining systems are Second World War era artillery systems incompatible with modern ammunition.[13]

Russia is relying on vast Soviet-era stores of vehicles and other equipment to sustain operations and losses in Ukraine at a level far higher than the current Russian DIB could support, nor will Russia be able to mobilize its DIB to replenish these stores for many years. The British International Institute for Strategic Studies (IISS) think tank reported on February 12 that Russia is likely able to sustain its current rate of vehicle losses (over 3,000 armored fighting vehicles annually) for at least two or three years by mainly reactivating vehicles from storage.[14] The IISS also estimated that Russia has lost over 3,000 armored fighting vehicles in 2023 and close to 8,000 armored fighting vehicles since February 2022, and that Russia likely reactivated at least 1,180 main battle tanks and about 2,470 infantry fighting vehicles and armored personnel carriers pulled from storage in 2023.[15] Ukrainian military observer Kostyantyn Mashovets reported on February 4 that the Russian defense industrial base (DIB) can produce 250–300 new and modernized tanks per year and repair an additional 250–300 tanks per year.[16] Russia will likely struggle to adequately supply its units with materiel in the long term without transferring the Russian economy to a wartime footing — a move that Russian President Vladimir Putin has sought to avoid thus far.[17]


48 thoughts on “Russia Slows, Struggles to Supply the War Effort

  1. Macroduck

    This is fascinating. These reports come from private sources? Just look down from the sky and gather data at will that were once a principle target of espionage efforts. Once the stuff of dreams for the CIA, NSA and DIA, order-of-battle detail is now available to anyone who has an internet connection. Cracks me up.

  2. Moses Herzog

    I want what BODIT are saying to be true Menzie. I want it to be so bad to be true. I suspect you are the same Menzie, even though you don’t normally let emotions enter your picture as much as I do. And yet…… How long have you been singing this tune Menzie???

    Some media person asked a decent question~~ “Are the Americans reliable war partners??? America’s best friends in the Mid-East—the Kurds Menzie. Both in northern Iraq and in Syria, the Kurds. WE, America left them “high and dry” Menzie. It makes me SICK, it makes me ILL Menzie. HOW did we, America treat the Kurds, our best allies of the MId East?!?!?!?! Don’t sing me this G*ddamned U.S. State Dept tune Menzie You have a brain Menzie, don’t sing me a bullshit tune.

    1. Ivan

      These observations are from credible sources and support the idea that Russia is currently pretty much at maximum capacity and have about 2-3 years more in them – unless they get substantial increases from outside suppliers. We are talking observable facts not some song and a dance.

      However, you are absolutely right that the other side has its own challenges. One of them being that the US is not a reliable partner. That is why there is a substantial effort to build up a home defense industry in Ukraine. The war is shifting more towards drones and Ukraine has a strong domestic industry in that. It should also be noted that all of the big players in Europe are supporting Ukraine and preparing for the possible drop out of US (in case the Orange idiot gets elected).

      It all comes down to economic strengths of the players. Unless China gets behind Russia they have very limited resources to hold out past more than 2 years. China has absolutely no strategic interest in Russia taking a chunk out of Ukraine, and actually would lose if EU began diverting its spending away from imported junk. Europe on the other hand has a very strong strategic interest in seeing Putin cut way down to size as a warning to other imperialistic authoritarians who might thing of starting conquest wars.

      Putin is trying to take position of the 4 oblasts that he declared part of Russia. He has a strong information operation to make the public in the west think that they are risking nuclear war and that Ukraine simply cannot win this and has no choice but to compromise away a chunk of their country. A lot of useful idiots including some in the US congress are helping him. As much as he is trying to convince the world that “resistance is futile”, facts like the above is showing him as a Kaiser Wilhelm II.

      1. Moses Herzog

        Honest question: Are they accounting for the Chinese government, if they go 100% production, can’t meet the demands??

        1. Ivan

          So far the Chinese government has been very reluctant to bite the western hands that feed their economic miracle. You could even say they have suffered from the current conflicts if Western Europe spend their money on defense rather than buying Chinese trinkets. What benefits could possible get China to make such a huge risky gamble – that Russia gets to conquer 20% of Ukraine ?

  3. James

    IMO, Criminal Putin is destroying Russia. Russia has already dropped out of the top ten countries as measured by GDP. From reports – Putin has switched to a war-time economy. How much longer can Putin’s war chest/wealth fund maintain this level of expenditure/loss of military equipment – at least through Nov – when the chance of Putin’s puppet Trump can get back in charge and Trump throws NATO and Ukraine to ravenous Putin and kleptocrats. Putin is also destroying Russia – via demographics. Estimated 1 million + people have left Russia – mostly working age man and women. The causalities from Ukraine are staggering and on-going – now approaching 500,000+ Imagine what problems – 100,000s of war-torn individuals with mental and physical disabilities will cause. For a variety of reasons – I predict that Russia may drop out of the top 15 countries as measured by GDP.
    In encouraging economic news – a story that I don’t see much of in the media is the economic growth of Mexico. Now the U.S. top economic partner.

    1. Willie

      Exactly. Putin will be remembered by historians as the tsar who destroyed the historic Muscovite empire. Moscow has been a parasitic benefactor of that empire for centuries. Now it is falling apart. It reached its apex in the Soviet era and has been shrinking since then. Ukraine is one of the violent spasms of that dissolution.

      As far as Putin and the economy, I don’t see how he can survive without an ongoing war somewhere. Production is going into war materiel, not consumer goods. That’s going to make for raging inflation if it hasn’t already. Without external enemies to rail about, Putin has no explanation for the hardships people even in Moscow will be subject to soon enough.

      I hate to think what the toll will be on the population once this is over. There are 500k casualties, or will be in a month. Those who are wounded probably won’t be productive in the future. There will be at least the same number who are mentally damaged to the point they won’t be productive. And those who left probably won’t go back once they put down roots somewhere else. There will be few immigrants to replace those who left, died, or were damaged beyond repair. Those who do immigrate won’t be highly skilled people. The extraction industries are in the process of being destroyed or shut down.

      In a few years, and my crystal ball is completely opaque plastic when I say that, the empire will dissolve into a number of allied and squabbling small countries. Large areas of Siberia may come under Chinese influence. The portions of Manchuria that were taken from China, including Vladivostok, will revert to China. Putin will either die without a successor or will be deposed. More chaos will ensue.

      It’s going to be a mess. I hope the spooks and the State Department are prepared and working with the Chinese to contain the chaos that’s coming.

  4. James

    BTW – Menzie – I forget to mention this on your textbook post – My favorite economics textbooks are the Cartoon Introduction to Economics – can be checked out via the Internet Archive
    Too basic for your students – but for me – a good visual introduction to concepts.

    1. pgl

      The Cartoon Introduction to Economics! Maybe we should get a copy of this for people like Bruce Hall and Princeton Steve!

  5. pgl

    This reminds of “guns and butter” – a term coined 110 years ago. We used to have to endure some Putin poodle who seemed to think he coined the term. This poodle kept claiming it applies to the US but not to Putin’s Russia.

  6. Steven Kopits

    This would appear to be describing a war of attrition, that is, a war without goals or strategy beyond outlasting the other guy. Very WWI. And that takes a different mentality than the US has had for the last 100 years wrt warfare.

    1. pgl

      We were wondering who would replace JohnH as Putin’s poodle and there Steven Kopits goes fillin in the void.

      1. Steven Kopits

        I think if you look back at my comments here at Econbrowser, you’ll see I call for direct intervention against the Russians in Crimea in 2014. I could be accused of being an uber-hawk wrt to Russia, but not Putin’s poodle. Otherwise I wouldn’t have a near weekly column in the Kyiv Post, including one from just six weeks ago entitled,

        Go Ahead, Bomb Some Russian Refineries

        You’re making ridiculous and objectively false comments.

        1. pgl

          Taking out 10 refineries is supposed to be a game changer as far as world oil markets? Damn – you do suck at oil economics. But EXCUSE ME for the suggestion that your snide remark about how the US is supplying weapons to Ukraine finally was snide. Stevie – get a clue. No one with a brain thinks you have anything of value to offer.

          1. Steven Kopits

            “For the time being, Ukrainian strikes on Russian refineries appear to have no effect on diesel or gasoline prices in Europe, and the Biden administration should therefore yield to Kyiv’s priorities in the matter. By contrast, announced production cuts by Russia and other OPEC+ members represent an appreciable risk of higher oil prices.”


        2. pgl

          “The graph above does, however, show that European pre-tax fuel prices are about 50 percent higher than before the war, owing principally to the price cap and embargo.”

          You wrote this? You were the clown that kept telling us that these policies would be ineffective. Of course your claim here makes no economic sense but when does anything you wrote make economic sense? NEVER! BTW your own graph still shows a large Brent-Ural discount. Something else little Stevie dismissed.

          The Kyiv Post may have published your latest rubbish but it ain’t exactly the American Economic Review.

          1. pgl

            Steven Kopits
            May 9, 2024 at 12:28 pm

            Quoting yourself. Dude – if you have not figured out by now that NO ONE cares what babble you write – then you are dumber than a rock.

    2. Macroduck

      Your comment seems to assume that war of attrition precludes either side from adapting, that neither side could gain advantage by developing goals or strategy. It also seems to ignore the fact that the U.S. is not fighting this war.

      Little hint: Dismissive, hand-wavey stuff tends to fall short as analysis.

      1. pgl

        But, but, but – Stevie will be appearing on Fox and Friends soon so he is THE expert on everything!

      2. Steven Kopits

        I think I was referring to the evident impatience expressed by some Republican Congressmen, in particular. One sentiment I have both read and heard is that Ukraine is not winning and therefore we should withdraw our support. This would seem to imply some short term requirement for visible progress. That does not necessarily happen in a war of attrition.

        Of course, adaptation has, is and will occur, and at a reasonably rapid pace. It did during WWI as well. And yet, for almost four years, the war was all but a stalemate. Verdun and the Somme were both about ‘breakthrough strategies.’ Both were disasters. So, sure, both technological innovation and strategic initiatives can produce breakthroughs. Nevertheless, for the moment, this war looks like a heavyweight fight where ‘strategy’ devolves into ‘last man standing’. That lacks much emotional or intellectual appeal and would appear largely void of the kind of dynamism which has characterized US military actions in the last 85 years. It is harder to explain to the public.

        1. pgl

          Stevie cares what J D Vance says? I don’t because Vance is a clown. Sort of like Stevie.

        2. Bruce Hall

          Steven, you are wasting electrons on pgl if you think you will have a rational discussion from his side. He thinks he is showing signs of intelligence with his attempts at mockery, but he is only showing signs of immaturity. I’m sure he has the capability of defending his opposition to someone else’s comments in a rational and civil manner; he simply chooses the opposite.

      3. Ivan

        You nailed it (him). When a war gets past its first year it is almost per definition a war of attrition. Neither side could run over the other, so now they have to outproduce or outstrategize the other. The US was spectacularly successful in the WW1 and WW2 wars of attrition, and has been less spectacular in others. However, that doesn’t mean Ukraine cannot succeed without the help of US. The adaptations seen by Ukraine have been remarkable as has the inability of Russia to adapt to a changing picture. Its late spring and Putin is still wasting his dwindling stock of drones and missiles on hitting power plants, even as new missile defense batteries and ammo for the old ones are hardening defenses around actual strategic targets.

        1. Steven Kopits

          World War II was not a war of attrition for the US, or indeed, any of the players. Trenches were largely useless and armor ruled the field. US military actions every since have largely been in this mold.

          World War I was, in fact, very much a war of attrition, with minimal gains by either side for years at a time.

          Very different wars in that respect. The current war more resembles WWI because armor has become devalued.

          I think the question of whether Ukraine can ‘win’ the war is an interesting one. How does one define victory? If it is the military expulsion of Russian forces from Ukrainian territory without US help, well, I am doubtful that can be achieved. Indeed, I question whether than can be achieved without NATO soldiers, which is in effect what Macron is promising. Therefore, if the intent is to expel Russians occupiers by force, then NATO must enter the war directly at some level.

          I support that, by the way. Do the other readers?

          1. Ivan

            You seem to forget how that WWI war of attrition was eventually won. Victory was not won by either sides expulsion of the other. It simply ended when the Kaiser was shown that he didn’t have the resources to continue and was facing a few years more, at the most, before he was going to be overrun. If backed by western economies Ukraine could win the exact same way. Someone will eventually show Kaiser Putin the truth and he will understand that the longer this continue the bigger a hole his country will be sunk into.

          2. Steven Kopits

            I wasn’t talking about economics, but about actual warfare.

            I meant a definition like this:

            “Attrition warfare is a military strategy consisting of belligerent attempts to win a war by wearing down the enemy to the point of collapse through continuous losses in personnel, materiel, and morale.”

            Maneuver warfare or a blitzkrieg is not attrition warfare. US victories in WW2 were not victories of attrition, but rather outright defeats in the field. Right now, the Ukraine war is one of attrition.


  7. Bruce Hall

    Surprised you are referencing that right-wing organization, ISW for your information.

    1. Menzie Chinn Post author

      Bruce Hall: I dunno why. I’ve cited ISW umpteen times before. I’ve cited AEI, Mercatus, Cato, IISS, Tax Foundation, American Action Forum too. I think you have the idea I’m a raving liberal. Most of what I write on is mainstream economics.

      Remember what I did before I was a blogger – research assistant for (and coauthor with) Peter Navarro, research assistant for Robert Crandall and Cliff Winston (neither raving liberal economists), CEA staff economist in the G.W. Bush White House CEA.

      1. Ivan

        Peter Navarro !!!! – oh lord; of all the arrogant idiots of this world – what did you do that God had to punish you with working for HIM ?

        His ignorant blabbering on Trumps Covid task force cost a lot of human lives.

        If you visit him in jail please bring him a black rose from me.

          1. Moses Herzog

            Careful now, the last living member of “Pantera” is the lead singer, Phil Anselmo (this is a clever/ironic comment, you should actually put this one up on the blog)

            footnote: A man who “went off the rails” several times

    2. pgl

      “The Institute for the Study of War advances an informed understanding of military affairs through reliable research, trusted analysis, and innovative education. We are committed to improving the nation’s ability to execute military operations and respond to emerging threats in order to achieve U.S. strategic objectives. ISW is a non-partisan, non-profit, public policy research organization.”

      I can see why you do not like their writing. Reliable research and trusted analysis are mortal sins for little Brucie boy.

      1. Ivan

        I have read ISW reports on Russia almost daily and there is absolutely no basis in reality when Bruce postulates “right wing bias”. If anything they are presenting the opposite of the right wing Putin propaganda narratives. They have a deep professional understanding of all aspects of war and are not just giving battlefield/military tactical and strategic reports and analysis, they also points to the information war moves. I am allergic to right wing blabber and would have left that site long ago if they had been peddling even a little of that BS.

        1. Anonymous

          How’d ISW do predicting the 2023 “Ukraine counter offensive” outcomes?

          IIRC poorly from the little I read, I stopped taking the Kagan institute seriously after that.

          1. Menzie Chinn Post author

            Anonymous: Really? Like this 5 June 2023 assessment:

            Russian and Ukrainian officials are signaling the start of the Ukrainian counteroffensive. ISW offers no assessment of these signals at this time. The Russian Ministry of Defense (MoD) claimed on June 5 that Ukrainian forces conducted a “large-scale offensive” across five sectors of the frontline in southwestern Donetsk Oblast on June 4.[1] The Russian MoD claimed that Russian forces repelled all Ukrainian attacks and assigned Chief of the Russian General Staff Army General Valery Gerasimov to oversee the southwestern Donetsk frontline.[2] Ukrainian Deputy Defense Minister Hanna Malyar noted on June 5 that Ukrainian forces are “transferring to offensive actions” in some unspecified areas of the front.[3] Malyar added that Russian sources are actively spreading information about the Ukrainian counteroffensive to deflect attention from Russian losses in the Bakhmut direction. The Russian MoD’s claims that Russian forces immediately repelled Ukrainian counteroffensives are consistent with previous false Russian claims made during past counteroffensives. Ukrainian forces are likely making limited gains despite Russian denials. ISW will not attempt to assess at this time whether or not these gains are part of broader counter-offensive operations. ISW observed an increase in combat activity in different sectors of the frontline but will not speculate about the intent, weight, or focus of Ukrainian counteroffensives operations.[4] A successful counteroffensive operation may take days, weeks, or even months before its outcome becomes fully clear, during which time Russian sources may falsely claim to have defeated it.

            Didn’t seem too booster-ish to me.

        1. pgl

          Come on Brucie – no one with a functioning brain follows the mindless trash on Faux News. That’s your thing since you were born without a brain.

        2. pgl

          Reading the bio of General Jack Keane. He was offered a position in the White House by Dick Cheney. He declined. He was also offered a position in Trump’s White House. He twice declined. Gee Brucie boy – he shows a lot more judgment than you would ever have.

  8. Bruce Hall

    It’s known that Russia has used Iranian missiles and drones against Ukraine and is actively procuring artillery munitions from North Korea. China has been quiet about providing military equipment and supplies, but seems to be willing to act as a logistics middleman.

    Interestingly, the US military has its own issues with regard to Russia and China.

    1. Macroduck

      One thing from a link in Brucie’s link:

      ‘“A lot of what happened is Congress just getting greedy and finding politically convenient ways to fund programs that they weren’t willing to raise revenue for,” said Moulton.’

      In other words, refusal to pay for programs (like the Strategic Minerals Reserve) with taxes or borrowing has led to the sale of materials from the Strategic Reserve. So if we could just raise taxes, we could fund the Strategic Minerals Reserve at a reasonable level.

      What a good idea. Thanks.

      1. Bruce Hall

        Look, I’m not going to refer to you as Duckie because I think you have a modicum of civility, but the point was not about the past mistakes of selling off critical strategic supplies to fund some other (unnamed) programs, but the need to address the situation (perhaps by using funding from the programs that “borrowed” from the SMR). Compounding a past mistake by ignoring the present problem is not much of a solution.

        1. pgl

          So in other words the past mistakes Trump made by ignoring this issue is all good to little Brucie boy. Good to know. BTW twit – there is a current push to address the current situation. Then again Biden has made up for a lot of Trump’s inactions and blunders.

        2. 2slugbaits

          Bruce Hall

          mistakes of selling off critical strategic supplies to fund some other (unnamed) programs, but the need to address the situation (perhaps by using funding from the programs that “borrowed” from the SMR).

          Well, if the program can’t be named, then it might be a little difficult to using future funding from that unnamed program. Do you have an actual name for those supposedly “unnamed” programs that “borrowed” from the SMR?

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