GLAVNOE: The past month in Russia, January 2026

Putin’s orders crying in the wilderness

On January 6 the business daily Kommersant revealed that a month prior, on December 8, Vladimir Putin had ordered the government to ensure that the Russian economy returns to sustainable growth this year while also ensuring that inflation stays below the Central Bank’s target of 4-5 percent and increasing tax collection.

Putin’s order should be regarded as a political product, since, given the current structural and political limitations, over which they have little influence, the government and the Central Bank have very little room to kickstart growth. Leaking the order however creates the impression that the president is aware of and concerned by the slow-motion crisis of the Russian economy and allocates responsibility in advance – downwards. This is how crisis management is supposed to work in Russia’s political system.

In the third quarter of 2025 economic growth slowed to 0.6 percent year on year, with widespread expectations of zero growth or a recession until at least the second half of 2026. Civilian sectors of the economy have seen declining output in 2025, with some – e.g. the automotive and the coal industry – having already entered a crisis and others – e.g. metallurgy and machine building – on negative trajectories. Freight loading on the network of Russian Railways decreased by 5.6 percent in 2025. The oil industry, sensitive to global price fluctuations and targeted by sanctions, has also had a bad year, with a comparably bad outlook for the coming one. Industrial facilities are now facing an elevated risk of drone attacks.

Strictly domestic conditions are not conducive to creating stable growth either. Inflation has slowed, but tax and tariff hikes that come into force this year, including a VAT hike from 20 to 22 percent, stricter enforcement of current tax laws (which Putin also demanded), a quasi-tax on electronics and utility tariff hikes have contributed to expectations of higher inflation over the year, including among businesses. This may lead to the Central Bank continuing its rate-cutting policy only cautiously. Stricter tax enforcement, especially at the level of the regions, which cannot count on the largesse of the federal budget, can result in further businesses entering the grey economy. At the end of December business leaders have yet again signaled to Putin that the erosion of property rights is a problem, but it is questionable that the president listened this time, considering that business leaders have been raising the issue of unpredictable asset seizures for more than two years now, and their volume has only grown, with the state having seized an estimated 3.12 trillion rubles worth of assets in 2025 only. Labor shortages exacerbated by the war have showed no signs of easing.

None of these are likely to change under war conditions, barring an unlikely decoupling of sanctions from Russia’s military campaign in Ukraine. Even in the event of a ceasefire, shaky property rights and the possibility of sanctions snapping back as one of the security guarantees for Ukraine would likely impede foreign investment. In short, Putin can and very likely will again order the technocrats in his extended government to perform an economic miracle. Without political agency to make decisions on the most important structural limitations of Russian economic growth, however, these otherwise capable technocrats can only do what they have been doing over the past four years: manage a long-term decline as best they can.

Underinvestment and its consequences

January is also increasingly a time when this long-term decline becomes visible to a large number of Russian citizens due to systematic failures in Russia’s ageing communal infrastructure system, which has been plagued by underinvestment and ineffective ownership structures. Most often the failures take the form of heating failures and electricity blackouts. In spite of the authorities’ claims that so far fewer accidents of this sort have happened over the current heating season than a year ago, over the past month there has been a constant flow of news concerning smaller or larger outages in most regions. In mid-December a failure at a power plant in Rostov left 400,000 people without heat or hot water. In the Altai Territory town of Rubtsovsk, more than 120,000 people had to be evacuated in mid-January due to a heating failure. In late January, thousands of residents of Murmansk, Russia’s “Arctic capital” and Severomorsk, the main base of Russia’s Northern Fleet, were left without power for four days due to an accident with aging infrastructure. Similar accidents happened in Angarsk, Saratov, and a number of smaller cities, while in Kamchatka snowdrifts paralyzed the region. In some regions, the war also impacted utilities: in the Belgorod Region, bordering Ukraine, more than 600,000 people lost access to basic utilities due to drone strikes. Once again, the problem has been fairly obvious for years, with an estimated cost of a staggering – but not unfeasible – 4.5 trillion rubles, even at the highest levels of political decision-making, but, in spite of frequent pledges, the Russian government has not been willing to put enough money behind solving the problem. Instead, the “military-style” approach of Belgorod governor Vyacheslav Gladkov is held up as a positive example; this focuses on allocating personal responsibility to municipal leaders for network failures.

Perhaps the most egregious example of harm likely caused by underinvestment in social infrastructure over the past month was the tragic death of nine newborn children in a maternity hospital in the Kemerovo Region industrial town of Novokuznetsk over just a couple of days, with several more needing intensive care due to an otherwise preventable infection.

The authorities arrested the head physician of the clinic, closed it down for 90 days and a federal audit was ordered. But the problems run deeper. After an uptick of health care expenditures during the pandemic, regions, which are primarily responsible for maintaining and building hospitals, started reallocating funds away from health care. In 2022-23, health care expenditures in consolidated regional budgets dropped even in nominal terms, and the gains since have not been enough to offset inflation. The Kemerovo Region itself has closed 16 hospitals since 2020, along with around 100 midwife stations. Low salaries in the provinces, which have incentivized medical personnel to move to larger and wealthier cities, has led to staff shortages in regional hospitals, and, based on local reporting, staff shortages have been an exacerbating factor in the Novokuznetsk tragedy. According to the Russian government’s own estimates, in 2025 there was a shortage of 23,300 doctors and 63,500 mid-level medical personnel country-wide. A report by To Be Exact, a data analysis project, found that residents of poorer and wealthier regions faced vastly different access to health care.

Kemerovo, whose primary industry, coal mining, has been facing an acute crisis for the second year, and as a consequence had to implement deep cuts in the regional budget, is especially poorly placed to improve the situation in the short term. In the absence of means to do so, the publicized allocation of responsibility is likely the direction in which the case will evolve, and this does not always work. In a particularly tone-deaf moment, Ilya Seredyuk, the region’s governor, even allocated some of the blame to the mothers. 

Chechen succession in the focus

Another hard-to-fix issue of systemic proportions was highlighted over the past month when Adam Kadyrov, the 18-year-old son of Chechnya’s despotic ruler, Ramzan Kadyrov, was reportedly seriously injured in a car accident in Grozny, the regional capital. Adam, who gained notoriety in 2023 when a video, shared by his father, showed him beating a political prisoner in pre-trial detention, has since rapidly ascended the career ladder of Chechnya’s politics, dominated by the Kadyrov clan and their hangers-on. Currently, among other things, he is the secretary of Chechnya’s Security Council. His wedding last year, when he was only 17 years old, his publicized meeting with Vladimir Putin, and the persistent rumors and reports about Ramzan Kadyrov’s declining health have prompted speculation that Ramzan might have de facto designated him as his heir. As analyst Harold Chambers explains in a recent article for Riddle Russia, this is a much more complicated matter, not the least because of Adam’s still very young age and political circumstances being vastly different from those that had facilitated Ramzan’s inheritance of the position from his father, Akhmat, two decades ago. Ramzan has also recently promoted his eldest son, Akhmat, to regional deputy prime minister, suggesting that his position was not weak, either.

At the time of this writing, Adam Kadyrov’s condition is unclear; he was taken to a Moscow hospital and regime-linked media have been tight-lipped about his condition, and officials are reportedly using threats to make sure that nothing gets out. The purpose of this is likely to prevent speculation about the causes and the potential effects of the crash on succession in Chechnya. The Kadyrovs’ influence in the republic seems difficult to challenge, but this has been the consequence of the personal importance of Ramzan to Putin and the generous subsidies that the Russian federal budget transfers to the region, which depends on these transfers to cover some 80 percent of its expenditures. This does not mean that the Kadyrov family, which has had an uneasy relationship with Russia’s security elite, does not have enemies in the republic. The perception that Kadyrov’s grip is weakening or indeed that foul play was involved in the younger Kadyrov’s accident, may easily cause disturbances in the region’s politics.

Image: Putin and Kadyrov meeting, June 15, 2018. Image credit: Kremlin.ru, CC BY 4.0 <https://creativecommons.org/licenses/by/4.0>, via Wikimedia Commons