The Struggle to Fund the War: Ukraine and Russia's Economic Challenges

The war between Ukraine and Russia is causing serious money problems for both countries. Russia's economy is not doing as badly as some expected. It grew by 3. 6% in 2023 and 4. 1% in 2024. But it faces big challenges. Oil prices have dropped, and the budget is based on lower oil prices than before the war. This means Russia has to borrow more, which can cause inflation. The country also has trouble with skilled workers, as many have left or been drafted into the military. Growth is expected to slow down to about 1% in the first half of 2025. However, Russia is good at finding ways around problems, so a total economic collapse is unlikely. Ukraine, on the other hand, is in a much worse situation. It has a huge budget gap of $61 billion for the next two years. The country uses all its tax money for the war and relies on foreign help for everything else. This makes Ukraine very dependent on other countries. The European Union had a plan to help, but it fell through because of disagreements. Now, Europe has to figure out how to pay for Ukraine's needs. This is a big problem because Europe is not united on this issue. Ukraine hopes that Europe will eventually help, but the uncertainty is causing a lot of stress. Corruption is also a big issue in Ukraine. There have been reports of corruption even in the president's circles. War often leads to corruption, as seen in other countries. But despite this, Ukraine has managed to keep fighting. The country has been in a state of crisis since the Soviet Union collapsed, and corruption has always been a problem. However, it hasn't stopped Ukraine from fighting the war. The current corruption scandal shows how much pressure the Ukrainian government is under.