President Vladimir Putin international development envoy has warned that the Russian economy risks entering a dangerous berserk mode if it continues to be run entirely for the needs of the military-industrial complex, in a rare public expression of concern from within Kremlin circles about the sustainability of the war effort.
Boris Titov, a wealthy businessman who serves as Putin special representative to international organisations, told business news outlet RBC that the balance between military and civilian economies was essential for long-term stability. His comments came on the eve of a major economic forum that Putin will attend this week in Russia Far East, and just weeks before parliamentary elections scheduled for September 18 to 20.
Military and civilian economies have always existed in symbiosis everywhere. Many technical inventions that are useful for all originated within the military-industrial complex. The key lies in maintaining balance, Titov said. He described an economy focused solely on war production as a kind of berserk mode that can only exist for a very limited time, using a term derived from mythological Norse warriors who entered a trance-like fighting state.
Economy Stalls as War Costs Mount
The warning comes against a backdrop of sharply deteriorating economic indicators. Russia GDP growth is expected to reach just 0.4 percent this year, a dramatic slowdown from the wartime boom of previous years, as non-military sectors stagnate or shrink under the weight of high interest taxes and labour shortages. Ukrainian attacks on economic targets including refineries, online retailers and oil and grain export infrastructure may push the growth rate even lower.
Titov comments echoed a statement last month by Moscow technocrat mayor Sergei Sobyanin, who argued that killing a normal economy is equivalent to killing the whole country. Together the two statements represent a growing chorus of concern from influential figures who see the current economic trajectory as unsustainable, even as hardliners in the security establishment push for deeper mobilisation of resources.
Russia has hiked taxes, embarked on property redistribution and welcomed contributions from businesses to finance the war. Most recently, the Kremlin threatened business owners who are not doing enough to protect their facilities from Ukrainian drone strikes, effectively making the private sector liable for damage caused by an act of war. War hawks and some government officials often cite the reorganisation of the Soviet economy under Josef Stalin during World War Two as a model, invoking the wartime slogan Everything for the front, everything for victory.
Slow-Motion Bank Run Accelerates
Alongside the growth slowdown, Russia is experiencing what analysts describe as a slow-motion bank run as citizens pull billions of roubles out of the financial system. According to Central Bank data, more than $32 billion has been withdrawn from Russian banks in 2026, with demand for physical cash accelerating dramatically over the summer months.
Nearly $3.4 billion was withdrawn during just the first two weeks of August, following approximately $7.3 billion in July and more than $4.5 billion in June, according to figures cited by financial media. Five of Russia seven largest banks have recorded net outflows of individual deposits. Rosselkhozbank shed 270.5 billion roubles, a fall of more than 15 percent, while Alfa-Bank, the country largest private lender, lost 179.4 billion roubles or 5.6 percent of deposits.
The withdrawals are driven by a combination of factors. Mobile phone jamming by the authorities has made digital payments unreliable, pushing people toward cash. More fundamentally, fear of asset seizures to fund the war has eroded public confidence in the banking system. Rumours of a post-election mobilisation have intensified the anxiety, recalling the September 2022 mobilisation that triggered a mass exodus of hundreds of thousands of men who fled to neighbouring countries.
Structural liquidity inside the banking sector has also deteriorated, with the deficit reportedly exceeding 2.7 trillion roubles by mid-August, the highest level since the crisis surrounding the initial invasion in March 2022. Large companies are also moving money beyond the reach of domestic regulators, with more than $9.4 billion flowing out of the banking system in the second quarter of 2026 alone.
Mobilisation Fears and Election Pressure
The economic anxieties are inextricably linked to persistent rumours of a large-scale post-election military mobilisation for a final push to seize the remaining portions of the Donbas region. The Kremlin has officially dismissed such rumours as a hoax, but the Institute for the Study of War assessed on August 31 that Putin appears to remain in favour of conducting covert mobilisation following the Duma elections.
Russian sources told The Economist that Putin is committed to deploying between an additional 200,000 and 300,000 troops, though the method of recruitment remains uncertain. The Kremlin has been setting conditions for some form of mobilisation and associated civil preparations, ISW noted, while attempting to reassure Russian society that involuntary conscription will not be imposed.
The only political party calling openly for an end to the war has been barred from the September elections, and opinion polls show growing fatigue from the conflict and support for a peace settlement. Andrei Klepach, the chief economist at the state development bank, lost his job last month after highlighting the economic challenges posed by the war in a public speech, a signal of the limits the Kremlin places on internal dissent.
As Putin prepares for the Duma elections and the economic forum in the Far East, Titov warning about berserk mode represents an unusual crack in the facade of confidence that the Kremlin has maintained throughout the war. Whether it leads to any change in economic policy remains to be seen, but the combination of falling growth, accelerating bank withdrawals and mobilisation fears paints a picture of an economy under severe and compounding strain.
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