Russia’s economy has turned into a militarized, "two-speed" system in which the military-industrial complex and war rents prop up growth by draining resources from the private sector and normal civilian industries.
Russian economy and the Russian regions are kept afloat by the war and state procurement, while the civilian sector and most regions are slipping into stagnation. Rising incomes and employment are essentially a bubble inflated by federal spending and a labor shortage, and by 2026 regional budgets risk falling into the red - meaning that ending the war without deep restructuring will almost certainly trigger a new, severe economic collapse.
The reforms and structural changes needed to escape this trap are politically out of reach for the Kremlin. As a result, the regime’s goal is not to prevent a crisis, but to avert a collapse:
prolong the "neither war nor peace" mode withing the country for as long as possible while maintaining high military spending;
intensify manual redistribution of resources in favor of the defense sector and "loyal" regions;
mask the deterioration in living standards with statistics and propaganda;
rely on gray export schemes and partial sanction relief without changing course.
In this context, Moscow’s interest in "peace negotiations" is not an attempt to end the war, but an effort to secure a favorable pause: to freeze the front and its territorial seizures, extract partial sanctions relief, and buy time to stretch out the inevitable crisis into a long, managed stagnation of the wartime economy.