The Kremlin wants to create an impression that its economy is performing well, but security analysts say the Russians are failing to account for the country’s “unsustainable” levels of defense spending, rapid inflation and a growing deficit.

Russian President Vladimir Putin on Wednesday claimed the country had a “manageable” budget deficit of 1.7% in 2024 and achieved a 26% increase in nonoil and gas revenue to more than $257 billion, according to the Institute for the Study of War think tank.

The Russian Finance Ministry recently released a report suggesting that government budget revenues in December reached about $40 billion — the highest level recorded since 2011 and a 28% increase from the year before.

Yet the think tank analysts wrote, “The ISW continues to observe macroeconomic data that directly contradict the Kremlin’s claim that the Russian economy is performing well.”

Moscow recently adopted policies aimed at increasing defense spending while the country faces growing labor shortages, declining savings and an increased reliance on government bailouts. Meanwhile, the Russian economy is facing rising interest rates, inflated salaries and deteriorating production capacity, the ISW said.

“These economic realities suggest that the Kremlin’s efforts to posture economic strength are largely an information operation aimed at reassuring domestic audiences and posturing Russian strength abroad while masking the true challenges Russia’s economy is facing, particularly heightened due to its war against Ukraine,” the ISW said.

• Mike Glenn can be reached at mglenn@washingtontimes.com.