Russian President Vladimir Putin travels to China to strengthen trade connections amidst escalating economic pressure.

Russia is facing significant economic pressures as it continues its war effort in Ukraine, according to recent reports. The Russian economy is teetering on the brink of recession, with inflation stoked by President Vladimir Putin's wartime spending and the impact of sanctions.

The Russian government has already diverted more than $60 billion from its extra-budgetary National Wealth Fund to help pay for the war effort. However, the Russian economy has less than $50 billion in liquid assets in the extra-budgetary "rainy day" fund, not enough to cover this year's budget deficit.

Spending on the war, particularly national security and defense, is forecast to be $213.4 billion this year. Economists estimate that under the current level of sanctions, Russia can sustain its war effort for another 12 to 16 months, but falling oil prices and further sanctions could compress that time frame.

Tension is rising among Russia's elite over the war's growing cost and the continuing threat of further sanctions. Some hawkish Russian officials believe Russia can still outlast Ukraine and its Western supporters with strict state controls over the Russian economy for two more years. However, others are more concerned about the economic impact of the war.

Russian President Vladimir Putin is facing economic challenges in sustaining the Ukraine war. The central bank's efforts to control inflation have caused investment to dry up, non-payments to soar, and economic growth to grind to a halt. Any reduction in oil purchases by India, a major purchaser of Russian oil, would have a significant impact on Russia's budget.

The Russian billionaire Konstantin Malofeyev suggested that Russia could end the war by forfeiting $300 billion in central bank reserves in exchange for the four Ukrainian regions it has illegally annexed. According to Malofeyev, the illegally seized regions could provide $10 billion in new taxes per year.

The fate of Russia's economy and its ability to continue the war also hangs on the decisions of President Trump and his threats to impose further sanctions on Russia. The United States and the European Union are likely to impose further sanctions against Russia in the coming months, with the EU preparing its 18th sanctions package aimed at Moscow's energy revenues and military industry. These additional sanctions could worsen Russia’s deteriorating financial situation, with risks of banking sector collapses and significantly impair the Russian economy's ability to finance its military operations.

At the same time, there are also significant economic interests who are for continuing the offensive. The economy of Russia is teetering on the brink of recession, but some believe that the potential economic benefits from the annexed regions could offset the costs of the war.

India and China are scheduled to meet with Putin at a summit this weekend. It remains to be seen whether these meetings will provide any economic relief for Russia or further exacerbate its economic woes.