Vladimir Putin’s military recruitment tactics could cause serious issues for the Russian economy further down the line, UK officials have warned.
As the Ukraine war approaches the third year mark in February, the Russian president is pushing his troops forward into conflict at their fastest rate yet.
Putin is thought to be trying to seize as much land as possible before Donald Trump gets into the White House and pressures Moscow into a kind of peace deal.
This has resulted in a record-high casualty rate, with more than 760,000 soldiers killed or injured and averaging 1,523 a day in November 2024, estimates suggest.
However, Kremlin has not yet turned to conscription to bolster its beleaguered army, out of fear such a move could make the war more unpopular.
Instead, Putin is offering financial incentives, according to the UK’s ministry of defence.
In its latest update on X (formerly Twitter), the MoD said Russia passed a law last month which “would allow military personnel who signed up after 1 December 2024 to have their loan written off”.
This would cover loans of up to 10 million rubles – approximately £73,670 or USD $94,400 – and would apply to their spouses, too.
That sum also comes on top of the loan repayment holiday scheme for Russian servicemen, which allows troops to have a grace period when paying back mortgages, consumer loans or microloans.
According to the independent Russian media organisation Mediazone, 411,000 repayment holidays for mortgages and personal loans have been taken up since October 2022.
The MoD explained: “Russia’s financial incentives to military recruits are almost certainly intended to secure sufficient replacements for their steadily increasing casualties.”
It said: “The incentives are almost certainly intended to reduce the potential for Russia to have to enact further mobilisations, which are seen by Russian leadership as both damaging to public support for the war, and raising the risk of further detrimental large-scale emigration.”
Putin tried partial mobilisation to bring 300,000 reservists to the frontline in September 2022, but it triggered protests – which are rare in Russia – and many eligible individuals to flee Russia altogether.
But, the MoD warned: “Writing off loan repayments will highly likely increase financial pressures on Russian banks into 2025, in addition to pressures from high interest rates and sanctions.
“This will almost certainly reduce the resilience of the banking sector to respond to a potential economic shock.”
The war and the subsequent sanctions from Ukraine’s western allies have heated up the Russian economy, pushing up inflation to more than 9%.
Meanwhile, the central bank’s interest rates are their highest in more than 20 years at 21%, meaning many Russians are tightening their belts.