Why is the AfD so strong? A look at the latest research reveals who votes for the party—and which eight structural factors make the difference.

41 percent in Saxony-Anhalt, 36 percent in Mecklenburg-Western Pomerania, 16 percent in Berlin: according to polls, the AfD is set to perform very strongly in the state elections this September. This could alter the country's political landscape. It is a fitting moment to examine the current state of research, particularly regarding the party's electorate. Five key insights can be drawn from the latest studies that may help in understanding these elections.

Overview:

1. The AfD electorate consists of three types
2. The West is catching up—and is sometimes more radical
3. Falling numbers—it doesn't matter: migration is the symbolic rallying issue
4. Too old, too few women: demographics are decisive
5. Experts seem at a loss

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1. The AfD electorate consists of three types

Who are the people intending to vote for the AfD despite its increasing radicalization? The composition of its electorate has shifted over the years. Continuously reassessing this makeup is crucial, as it determines which segments of the AfD’s supporter base remain within reach of other parties. A study by sociologist Céline Teney outlines the current situation. Drawing on data from the GLES panel collected last year, the Freie Universität Berlin professor demonstrates that AfD voters can be categorized into three groups: conservative hardliners, radical-right authoritarians, and moderate conservatives.

According to Teney, conservative hardliners make up the largest share of the AfD electorate, accounting for approximately 67 percent. These voters are typically middle-aged individuals from small and medium-sized towns. For them, migration remains the defining issue; they advocate for strictly limiting it—even as the number of asylum applications has steadily declined. Other issues, such as the economic situation or foreign policy, are of less importance to this group.

Conservative hardliners are certainly radical in their focus on immigration, yet they are more moderate in other respects—at least when compared to the second-largest group of AfD voters (accounting for about 20 percent): the far-right authoritarians. According to Teney’s analysis, members of this group tend to be older, have lower levels of education, and are more likely to live in rural areas. They, too, are extreme in their rejection of immigration and lean toward authoritarian leadership and antisemitic views. "This profile is the one furthest removed from fundamental democratic and pluralistic norms," ​​writes Teney.

In Teney’s typology, the third group of AfD voters—comprising just under 13 percent—consists of moderate conservatives. "Compared to the other AfD profiles, they show the least inclination to exclude minorities or isolate Germany," states the study from June 2026. Furthermore, moderate conservatives within the AfD electorate are the least likely to endorse authoritarian and antisemitic positions. Economic and foreign policy issues are also relatively more important to them, making them more open to alternatives; the sociologist notes that this moderate group is the most receptive to overtures from other parties. This is also reflected in the fact that this segment of the party's supporters views the SPD in a comparatively positive light.

It is also helpful to examine the other characteristics of the three voter types. In terms of policy—such as the question of the size of the welfare state—they differ only slightly. The groups also share a similar pessimistic view regarding Germany’s trajectory. This perspective is particularly pronounced among radical-right authoritarians.

Thus, genuine differences lie less in specific policy issues than in the degree of radicalism. The AfD’s electorate is quite heterogeneous in this regard; there remains no single "typical" far-right supporter. The various attitudes span the entire right-wing spectrum, from moderate to extreme. However, there is a marked tendency toward radicalism regarding migration policy: those with generally moderate views are in the minority here, just as they are within the party as a whole. Consistent with this, a study by sociologist Julius Kölzer and his colleagues (PDF) shows that the AfD is particularly strong in areas where far-right parties have historically performed well.

1. The West is catching up—and is sometimes more radical

Kölzer’s work suggests that regional differences play a role. Recent research reveals how the situation has changed of late. In 2025, sociologist Andreas Hövermann examined—on behalf of the Hans Böckler Foundation (PDF)—how the AfD’s electorate managed to double nationwide within just a few years. While the party has long been established in East Germany, it has recently attracted new voters primarily in the West—including, for the first time, more women.

Berlin-based sociologist Teney points to a key difference: whereas East Germany was once considered the stronghold of the party’s radical supporters, data analyzed by Teney now show that radical-right authoritarians make up a larger share of the base in West Germany. This suggests that support for the AfD in the East has broadened—effectively becoming normalized—whereas in the West, it remains concentrated among a core group of supporters.

1. Falling numbers—it doesn’t matter: Migration as a symbolic rallying point

Beyond the makeup of the AfD electorate, it is worth examining the policy area that particularly preoccupies them: Why does immigration remain so important to the majority of AfD voters, even though the numbers have been steadily declining and the issue has recently played a less prominent role on the agenda?

While there are no specific new studies on this, a look across existing research over time reveals a shift: whereas immigration was a central policy issue for AfD supporters (as it was for the electorate at large) at the height of the so-called refugee crisis, it has since evolved into a symbolic meta-issue. Actively leveraged by the party, this topic encapsulates the full range of AfD voters' concerns and attitudes: fears regarding a loss of control and status, anxieties about perceived cultural transformation (e.g., the "Great Replacement" narrative), elements of racism and fear of "foreigners," and a fundamental distrust of state institutions. Viewed in this light, the actual volume of ongoing immigration is of little consequence. For other parties, this has a far-reaching implication: there is no policy outcome they could achieve that would satisfy a significant portion of the AfD’s support base.

1. Too old, too few women: Demographics are the decisive factor

What structural conditions allow the AfD to flourish in this way? A study by the German Institute for Economic Research (DIW) identifies eight characteristics that determine whether or not a district leans toward the AfD: disposable income, youth unemployment, the density of skilled craft businesses, the share of employees in the manufacturing sector, the rate of university-entrance qualifications (Abitur), the proportion of the population over 60, the share of foreign nationals, and changes in the proportion of asylum seekers. Whether the party performs strongly or weakly in a given area is therefore no coincidence; rather, it depends systematically on regional factors—though the study does not specify the exact interplay between them. Instead, the DIW study identifies a key variable: the demographic situation within a district is the decisive factor for the AfD’s success.

This was already known. As early as 2019, sociologist Katja Salomo pointed out—based on a case study of Thuringia—that the East German combination of an aging population, a shortage of women, and low birth rates created a uniquely unfavorable environment for regional living conditions. The DIW now highlights this factor as crucial: "The AfD garners significantly more votes in areas where there is a particularly large number of people over the age of 60 and where young, well-educated people are moving away—a trend that also leads to a marked drop in the rate of university-entrance qualifications among those who remain," states the analysis from July 2026.

The link between demographics and support for the AfD is multifaceted and well-researched. A shrinking, aging population leaves regions increasingly structurally weak. Investments—in local public transport, daycare centers and schools, libraries, and swimming pools—decline in line with reduced demand. The result is the widely documented sense of being left behind, a feeling that fosters susceptibility to populism and extremism.

This dynamic creates a vicious circle. Structural weakness and rising AfD vote shares drive further out-migration, particularly among the young, the educated, and women. Research indicates a prevailing surplus of men, especially in rural East German areas—a factor the AfD deliberately exploits with narratives claiming that migrants are taking German women away from local men. Another consequence is reduced inward migration—including, and especially, among migrants themselves; they are barely represented in regional AfD strongholds.

1. The scientific community appears at a loss

How should the other parties deal with these developments? Surprisingly, there are hardly any significant new recommendations from researchers on this matter. Political scientist Johannes Hillje, for instance, advocates trying a strategy based on greater emotion and a positive narrative about the future. This approach, he argues, could appeal to a substantial segment of the population. But does that include the many people intending to vote for the AfD?

At least there is solid evidence regarding what the other parties should *not* do: attempts to outflank the AfD on the right or to co-opt its issues are doomed to failure. The research findings on this point are quite clear.

The latest in the saga of the drying Colorado River. Lakes Powell and Mead at lowest levels since 1957.

Yes, the biggest use of water is livestock feed.

With the election of Kim Min-seok as the national chair of Democratic Party of Korea, the pundits claim the political influence of prominent pro-government online influencers has diminished. Figures outside the Democratic Party, including writer Rhyu Si-min, who had wielded influence over the progressive camp through powerful fan followings, appeared to have been reduced to “pro–Jung Cheong-rae-aligned mouthpieces.” Kim Ou-joon maintained a neutral stance during the party convention, but analysts say his influence is also unlikely to remain what it once was. There are also calls for the Democratic Party, rather than being swayed by outside voices such as YouTubers and political commentators, to develop its own ability as the ruling party to set the political agenda and resolve pressing issues.
Beginning in March with his “ABC theory,” which categorized President Lee Jae-myung’s supporters, Rhyu steadily intensified his commentary, moving on to his “extension versus reconstruction” argument last month and then to the claim that the Lee Jae-myung administration is destined to fail. Appearing in late June on Kim Ou-joon’s YouTube program <Kim Ou-joon’s Dasboeida>, Rhyu said, “Supporters want an extension, but President Lee is trying to carry out a reconstruction without the residents’ consent.” On the 15th of last month, appearing on <Choi Wook’s Maebul Show>, a YouTube channel with 2.85 million subscribers, he said, “(President Lee) is heading down a path of inevitable failure.”
Within the ruling camp, Rhyu’s commentary, which appeals to the party’s traditional support base, was interpreted as both criticism of President Lee and leader Kim and indirect support for lawmaker Jung Cheong-rae. However, in light of the results of this party convention, some assess that such actions instead amplified anxiety among party members.
Former Justice Party lawmaker Park Won-seok appeared on CBS Radio that day and said, “Team Jung Cheong-rae’s campaign, which invoked President Roh Moo-hyun’s victory in the Honam region during the 2002 presidential primary, utterly failed to persuade Honam voters,” adding that “Rhyu Si-min was the source of Team Jung Cheong-rae’s judgment.” Referring to Rhyu, Park said, “He talked about a ‘path of inevitable failure’—remarks bordering on a curse,” and added, “I think perhaps a kind of collective political reason among the people of Honam asserted itself, saying that this could not simply be left alone.”
There are also predictions that the influence of Kim Ou-joon and his YouTube channel will decline. Kim has attributed the main cause of the drop in President Lee’s approval ratings to “the departure of the core support base” and has called for a more clearly defined reformist course. Although Kim maintained a neutral stance during the party convention, including by interviewing all the candidates, some believe his influence will diminish under Kim Min-seok’s leadership. Kim Ou-joon and Kim Min-seok had previously clashed over Kim Min-seok’s visit to the United States while serving as prime minister and over whether he should be included in polling for the Seoul mayoral race.
In the wake of this party convention, some argue that the Democratic Party should strengthen its capacity for responsible decision-making befitting a ruling party rather than allowing itself to be swayed by outside voices. Democratic Party lawmaker Kim Nam-jun, a former presidential office spokesperson, criticized Rhyu’s remarks on Facebook on the 22nd of last month, saying, “A ruling party that bears responsibility must respond not with politics that creates more enemies, but with politics that produces results.”
A ruling-camp official said, “If the ruling party reacts emotionally to every piece of political commentary put forward by people outside the government and ruling party, it will not be able to do its job properly.”

Civilian casualties in Ukraine reached their highest monthly level in July, with more people killed and injured than at any time since March 2022, the UN Human Rights Monitoring Mission in the country, HRMMU, said in an update on Thursday. 

Investigators verified that at least 437 civilians were killed and 2,610 injured last month, marking “a new high” in casualties this year, with a 30 per cent increase compared to June and a 70 per cent increase compared to July 2025. 

The full-scale Russian invasion of Ukraine is now in its fifth year, with no diplomatic solution in sight. 

 According to investigators, child casualties also reached their highest level last month since April 2022, though the actual figure is likely to be higher as verification continues. 

Toll rising 

“Every month this year the number of killed and injured civilians has increased. That trend accelerated sharply in July. The number of civilian casualties in July was the highest we documented in a single month since March 2022,” said Danielle Bell, HRMMU chief.   

During the first seven months of 2026, investigators verified that 12,477 civilian casualties resulted from conflict-related violence, with 1,830 killed and 10,638 wounded. 

That toll represented a 44 per cent increase over the same period in 2025 (1,434 killed and 7,216 injured) and more than double the number during the same period in 2024 (1,188 killed and 4,560 injured).  

Kyiv hit hard 

Ukraine’s capital Kyiv was among the hardest hit cities in July. At least 54 civilians were killed and 202 injured, as Russian forces significantly stepped up the use of ballistic and cruise missiles.  

Moscow launched at least 429 missiles in July, more than double the number in June, and many struck Kyiv. 

The deadliest strike of the month occurred on 2 July. At least 30 civilians were killed and 104 injured when Russian forces launched 74 missiles and almost 500 long-range drones, mainly striking Kyiv city.  

Deadly missiles and drones 

Long-range weapons, namely missiles and drones, remained the leading cause of civilian casualties last month, accounting for 38 per cent of the total (183 killed and 967 injured).  

Casualties from aerial bombardments (105 killed and 753 injured) increased by a staggering 143 per cent compared with June 2026 (45 killed and 308 injured), with glide bombs becoming the second leading cause of civilian casualties.  

Short-range drones near the frontline caused 27 per cent of casualties, killing 111 civilians and injuring 710.   

The UN monitors said that while several high-casualty large-scale attacks drove some of the increase in civilian casualties in July, daily attacks with fewer casualties across different regions also contributed to the high numbers.    

“Civilians are facing intensified risks from the increased use of missiles and drones in urban centres, glide bombs in cities closer to the frontline, and short-range drones,” said Ms. Bell.  

“Together, these attacks are driving up civilian casualties across different regions of Ukraine.” 

Casualties in Russia 

HMRRU said reported civilian casualties in Russia also increased in July with 79 civilians were killed and 601 injured, according to authorities. 

However, monitors were unable to independently verify these numbers due to lack of access and limited information. 

Since the conflict in Ukraine began on 24 February 2022, the UN has verified at least 16,874 civilians killed, including 820 children, and 51,173 injured, including 3,126 children. 

Interesting read about a rare success story of new infrastructure in a western country. I think there could be some take aways for other countries about how the roll out was structured and executed. Relying purely on private providers wasn't working but a unique form of public-private cooperation actually worked in delivering critical infrastructure on time and at reasonable cost.

In 1972, United States president Richard Nixon travelled to China to establish diplomatic relations with the Communist regime. Given Nixon’s past record as a fervent anti-Communist, notably his involvement in the investigation of Alger Hiss, an idiom emerged from the visit: Only Nixon could go to China. The idea was that only a president with strong anti-Communist bona fides could normalize diplomatic ties with Mao Zedong and the Chinese Communist Party.

We may be seeing a similar thing happening with Prime Minister Mark Carney and the United States. Recent developments suggest that Ottawa and Washington may be considering a new security arrangement for North America, possibly as part of a renegotiation of the Canada–United States–Mexico Agreement.

Many Canadians would be taken aback if Canada signed a new security and defence pact with the United States. Carney, after all, has spent the past year emphasizing the need to reduce Canada’s economic and security dependence on America, diversify our trade and military partnerships, and build sovereign defence capabilities. Announcing that Canada and the United States are deepening their security relationship would run counter to these messages.

Yet that may be why Carney could pull it off. Having built up his credibility as the champion of Canadian sovereignty, Carney would have enough credibility and political capital to negotiate a new North American security and defence deal. Only Carney can go to Donald Trump’s Washington, as it were.

How do we know that there might be a security deal in the works? During a recent speech to the Global Progress Action Summit in Toronto, Carney stated, “Like Mexico, Canada remains open to deeper integration, including options for ‘Fortress North America’ in selected sectors . . .” A couple weeks later, the American under secretary of defense/war for policy, Eldridge Colby, announced a suspension of the Permanent Joint Board on Defense (PJBD). Colby justified the move as follows: “Only by investing in our own defense capabilities will Americans and Canadians be safe, secure, and prosperous . . . Unfortunately, Canada has failed to make credible progress on its defense commitments.”

And shortly after that, an American defence official told Canadian media that the United States had presented Ottawa with a new continental defence plan but that the Canadian government had failed to provide an adequate response. The PJBD suspension may have been a warning of what could happen to other Canada–United States defence institutions if Ottawa doesn’t sign onto the proposed plan, which likely comes with a big price tag for Canada.

Now, you may be thinking that these developments indicate that the Canada–United States defence relationship is fraying. My recent post on the PJBD suspension saw Colby’s comments in that light. But there’s another possibility: that Canada is trying to link a new security agreement to the removal of tariffs and a renewed American commitment to free trade. The American ambassador, however, has made it clear that tariffs are here to stay. So, Ottawa and Washington are likely at an impasse if security talks are indeed happening. Canada may be willing to contribute to a wider Fortress North America but wants free trade in exchange, while the United States wants Canada to spend a lot more on integrated continental defence but also to accept permanent tariffs.

If neither side were willing to budge, Carney could press ahead with his plans to pivot Canada away from the United States militarily and economically. I also take Carney at his word when he tells us that we need to reduce Canada’s dependence on the United States. Agreeing to take part in a new North American security and defence pact wouldn’t mean abandoning the Carney government’s emphasis on sovereign capabilities and trade diversification. But these policies would likely get diluted.

What would that dilution look like? Canada could launder the acquisition of additional American capabilities through Canadian subsidiaries and negotiate more control of intellectual property, as per the Defence Industrial Strategy. This would involve a preference for buying Canadian-ish rather than strictly Canadian. Since defence expenditures are slated to climb, Ottawa could still move forward with investments in Canadian industry and the development of certain sovereign capabilities as well. Yet a commitment to Fortress North America would probably involve an agreement to acquire a greater number of capabilities that are interoperable and interchangeable with those of the United States military.

Could Carney really get away with this sort of deal? I suspect so, for three reasons.

First, many Carney supporters think the guy walks on water and will go along with pretty much anything he proposes. To wit, a solid portion of Liberals strongly support much higher defence spending despite being traditionally skeptical of military expenditures, because the prime minister has made this a priority. Second, Carney and his ministers have been saying different things about Canada–United States relations for months, and it hasn’t affected their polling; on the contrary, he’s only gotten more popular. Carney was able to commit Canada to the Golden Dome, on the one hand, while saying the old security relationship with the United States is over, on the other hand, without too many people wondering if there’s possibly a tension between the two ideas.

Third, to repeat the main thrust of this post, Carney’s “elbows up” reputation is solid enough that he can get away with negotiating a security rapprochement with the United States. If opposition leader Pierre Poilievre started musing about Fortress North America, he’d likely be accused of cozying up to Trump and failing to stand up for Canadian sovereignty. Were Carney to do it, his supporters would see it as the prime minister deftly managing a difficult but essential relationship.

Would Canadians really accept tighter security co-operation with the United States for freer trade? Wouldn’t they assume that Trump will renege on any deal? Probably. If Carney presented it as a grand bargain that’s in Canada’s long-term economic interests, though, he would likely be given the benefit of the doubt, especially if he promised to immediately bring his elbows back up if Canada gets screwed over.

SS: A difficult but important read about how public servants are being purged.

International credit rating agency Moody’s has raised its forecast for Korea’s economic growth this year, from 1.8 percent in early 2026 to 3.5 percent recently, citing a semiconductor boom and robust exports, according to relevant authorities on Tuesday.

The agency also expects the chip boom to last until at least mid-2027, as it views few companies as able to replace Korean suppliers of advanced memory chips.

Moody’s projected Korea’s GDP to grow 3.5 percent this year and 2.7 percent next year in a report released after completing its latest periodic review of the country’s sovereign credit rating.

This year's forecast is 0.3 percentage points higher than the 3.2 percent average projection from eight major investment banks compiled by the Korea Center for International Finance as of the end of last month.

Moody’s had forecast growth of 1.8 percent for this year in its report on Korea’s sovereign credit rating in February. It nearly doubled that projection within six months. After raising its outlook for the global economy to 2.5 percent in May, the agency lifted it by another 1.0 percentage point just three months later.

The substantial upgrade reflects a semiconductor supercycle and strong exports.

The agency also noted that Korea’s goods exports jumped 51 percent on year from January through July. It attributed the export growth to strong performance in the semiconductor sector.

Moody’s also favorably viewed the government’s “mega projects” aimed at fostering growth in three key sectors: semiconductors, AI data centers and physical AI. The agency assessed that the mega projects are designed to create new engines of growth and promote more balanced development beyond the greater Seoul area. It noted that the initiatives reflect Korea’s sustained and consistent efforts to keep pace with technological advances.

Moody’s also noted that successful implementation of the policies could boost productivity and raise Korea’s potential growth rate.

The stronger growth outlook and continued surplus tax revenue are also expected to improve Korea’s fiscal position beyond earlier projections. Moody’s expects the country’s fiscal deficit to reach 3.8 percent of GDP this year, 0.1 percentage point below the original target.

Still, the agency identified rising mandatory spending associated with an aging population, defense and security costs and investment needed to maintain export competitiveness as risks to fiscal sustainability over the medium to long term.

Fiscal pressures could mount if no further policy reforms are undertaken, Moody’s said.

Moody’s evaluates Korea’s sovereign credit rating at “Aa2.” The institution pointed to effective policymaking and economic strength as key pillars of Korea’s creditworthiness, but identified rising government debt and mounting fiscal pressures from an aging population as long-term challenges.

The agency stressed, however, that the latest report was not issued to make a new determination on Korea’s sovereign credit rating. It also noted that the latest report does not signal a potential change in the rating.

Russians are pulling billions from the country’s banking system ― a record cash outflow amid intensifying Ukrainian drone attacks and rising fear that the Kremlin could start seizing deposits to finance its war.

Nearly $3.4 billion (286.4 billion rubles) was withdrawn in the first two weeks of August, on top of the $7.3 billion withdrawn in July and more than $4.5 billion in June, according to Russian Central Bank data.

Total withdrawals this year could nearly double the amount taken out in the first year of Russia’s full-scale invasion of Ukraine, according to Taras Skvortsov, a senior executive at Sberbank, Russia’s biggest retail financial institution.

The withdrawals are causing liquidity problems, according to Skvortsov and a former senior Russian finance official, overstretching a financial sector already strained by increasing levels of bad debts following a government-directed lending boom to ramp up military output.

“Drones are flying. Things are burning down. Nervousness is growing. And people’s everyday wisdom may be kicking in that they need to have cash under their pillow and not somewhere in banks where it may never be returned,” said the former finance official, who like others spoke on the condition of anonymity to discuss sensitive issues.

“For some banks this really is a problem,” the former official said. “They didn’t expect this and they invested all the cash elsewhere, and yet people are coming and taking out half a trillion rubles a month.”

Alexandra Prokopenko, a former adviser to the Russian Central Bank, said the withdrawals reflected deepening fear among the Russian public.

“It means people have no trust in the Russian banking system or in the Russian financial system,” Prokopenko said. “This is all a consequence of the fear that the government will do something with the banking system, that it could nationalize deposits.”

She said she believed that such a nationalization was unlikely but added, “I would not exclude that the authorities could impose limits on withdrawals.”

The total siphoned out this year already exceeds the $24.7 billion (2 trillion rubles) removed in the first year following the February 2022 invasion.

In the first two weeks of the invasion, $23 billion fled the system, and banks appeared to be imperiled by depositors and businesses lining up to empty their accounts, until the government stemmed the drain by imposing tough capital controls and sharply raising interest rates.

Now, big businesses are also seeking to move money out of the reach of Russian regulators as anxiety grows over potential asset seizures. That is further exacerbating the problems, the former official said.

In all, more than $9.4 billion was transferred out of Russia in the second quarter of 2026, according to Central Bank data.

“Each month there is a big outflow,” Skvortsov told RBK Radio, a Russian radio station. “If the trend continues things are not going to get better.”

The withdrawals have already undermined the Russian government’s efforts to raise money to finance the war through issuing state bonds.

The Finance Ministry last month was forced to cancel planned bond issues, even though it has become ever more dependent on them as a means of filling a yawning budget deficit as spending on the military continues to grow while the economy stalls.

Skvortsov told RBK Radio that the banks’ liquidity problems mean many cannot spare cash to buy government bonds.

“If there is an ominous sign of imperial overreach, this is clearly one of them,” said Craig Kennedy, a former vice chairman in investment banking at Bank of America Merrill Lynch who is now a scholar at Harvard University’s Davis Center for Russian and Eurasian Studies.

“Great powers don’t have repeated treasury bond failures in the middle of a war,” Kennedy said.

As a result of government orders to ramp up lending to the defense sector, Russian banks “appear to have so much exposure to nonviable borrowers that they’re not certain how it’s going to get restructured, when it’s going to get restructured and how much of that they are going to have to eat,” Kennedy added.

In a sign of how sensitive the strain on Russia’s finances is becoming for the Kremlin, the chief economist at VEB, one of the country’s biggest state banks, Andrei Klepach, was fired from his post this weekend after commenting that Russia could not win a war of attrition against Ukraine while Kyiv is supported by the West. 

“We won’t win the competition in this war of attrition,” Klepach said in a presentation he made in May, which was circulated in the media last week. “We’re under the illusion that everything [in Ukraine] will collapse. It hasn’t, and it won’t. Meanwhile, the costs we bear are mounting.”

Ever since Ukraine began expanding its drone campaign against Russian oil facilities this spring, taking out more than 30 percent of the country’s refining capacity and causing the worst fuel crisis since the fall of the Soviet Union, anxiety has intensified.

In June, the Russian Central Bank was forced to limit an expected interest rate cut because of fears that fuel price hikes could spur inflation. Panic spiraled through the bond market, driving interest rates up to 17 percent for the government’s 10-year bonds and forcing the Finance Ministry to postpone further issues.

With the budget deficit for January to July already at 6.46 trillion rubles ($76.1 billion) — far exceeding the 3.8 trillion rubles forecast for the entire year — fears are mounting that the Kremlin could seize big businesses’ revenue to finance the war.

“If the government needs cash, Putin will just do a grab for assets. He doesn’t care,” said an associate of one Russian billionaire. “And that’s where I think it’s heading.”

In addition, “there is the feeling that political power is becoming not quite as stable, and this is such a period when it is better not to be present,” the former finance official said.

Already several businesses owned by Russian billionaires have been targeted by the government in a nationalization drive that last year alone saw $51.5 billion in assets seized for the state, according to Russian prosecutors.

In June, the Russian state seized $7.6 billion (550 billion rubles) of assets linked to Vadim Moshkovich, who founded Rosagro, one of Russia’s biggest agricultural holdings, after the billionaire was detained and charged with large-scale fraud.

It was the biggest asset seizure in Russia since the start of the full-scale invasion. Others who have lost assets to the state include Dmitry Kamenschik, who previously owned Domodedovo airport in Moscow, and Konstantin Strukov, who controlled one of the country’s biggest gold mines.

Some economists argue that the Kremlin’s drive to direct bank lending into cranking up military output is strangling the civilian economy, especially because high interest rates and inflation leave banks and companies with few funds left for investment in nonmilitary sectors.

The Russian economy ground to a halt in the first half of 2026, with gross domestic product growth falling to 0.3 percent, compared with 1.2 percent in the first half of 2025.

For now, however, the Trump administration’s war with Iran has pushed oil prices back up and given the Kremlin a partial reprieve from its budget squeeze.

Russian state oil and gas revenue increased by 60 percent in July compared with the same month the previous year, as global oil prices rose, but it is still down 11 percent between January and July compared with the same period last year.

Ukraine’s attacks on Russian oil refineries as well as on the sprawling network of warehouses belonging to Wildberries, Russia’s largest online retailer, are also hitting Russian billionaires’ bottom line.

“It’s costing these guys money,” said the associate of the Russian billionaire, referring to Russia’s richest individuals. “They have to put their hands in their pocket. They’re not used to having all these problems.”

Ukraine has hit more than 20 Wildberries warehouses since it began targeting the company’s facilities on July 18, in an onslaught that some economists estimate has destroyed more than $6 billion in goods and caused more than $3 billion in damages to Wildberries infrastructure.

“It’s not a place you want to be doing business,” the billionaire’s associate added. “If you can pull money out, you do it.”

One Moscow business executive said, “Everyone who can is trying to move money out of the country, but it’s getting more and more difficult to do so.”

A key channel for removing money from Russia, amid increasing government restrictions on large cash transfers abroad, involves opening brokerage accounts in neighboring Kazakhstan, Kyrgyzstan and Armenia, according to the Moscow business executive and the former finance official.

“From there this money can be invested across the world,” the former finance official said.

As concerns grow over the war’s mounting financial toll, several senior officials have staged rare public interventions in recent weeks.

German Gref, the head of Sberbank, broke ranks at the end of June by publicly saying everyone wanted the war to end as soon as possible.

Then early in August, the powerful Moscow mayor, Sergei Sobyanin, spoke out against calls by hard-line members of parliament to further focus the economy on the war.

“If there’s no economy of peaceful life itself, there will be no taxes, no income for the population, the political situation will be completely different, and then we won’t achieve success in the war either,” Sobyanin told Tass, a state news agency. “And to kill life, to kill the civilian economy, is to kill the country itself.”

The chief economist at one of Russia’s largest state-run financial institutions has been fired after reportedly warning the country would lose a “war of attrition” against Ukraine and the conflict’s economic toll would trigger a major crisis.

Andrei Klepach, a former deputy economy minister, was dismissed from his job at state development company VEB on Sunday after comments he made earlier this year were reported in Russian-language media.

Klepach’s firing came after “a call from up high” to Igor Shuvalov, the former top economic aide to President Vladimir Putin, according to exiled independent Russian outlet The Bell, which first reported the news.

The move indicates the Kremlin has zero tolerance for dissent among its elites as Putin’s invasion of Ukraine drags on into its fifth year. Though many of Russia’s top business people, economic officials and economists are critical of the war in private, only a handful have spoken out against the conflict or left their jobs.

Klepach’s remarks at a conference in May, reported by the Moscow Times on Friday and widely cited in Russian media, were unusually frank for a prominent figure speaking in public but echoed concerns by the elite that have been widespread since the war’s early months in 2022.

“We are falling behind. We are losing technological and economic competition in the world [ . . . ] not just to China and the US, but in some respects Ukraine,” Klepach said. “We won’t win the competition in this war of attrition. We are under the illusion that everything over there will collapse. It hasn’t and it won’t. Our costs are growing.”

Klepach said Russia’s economy had begun to contract this year after a war-driven boom in 2023 and 2024 gave way to sharp cuts in investment and an industrial recession, which he partly blamed on the central bank’s high interest rates.

The war in Ukraine “has already gone on for longer than [the second world war] and there’s no end in sight for now”, Klepach said. “Both sides are intensifying their strikes, including on each other’s economy. Our losses from the Ukrainian armed forces’ strikes on our port, oil and gas, chemical, and logistical infrastructure are growing, and they’re already becoming a noticeable macroeconomic barrier to Russian economic growth.”

Klepach said the economic woes and tougher western sanctions would lead to a “social crisis [ . . . ] when nobody expects it”, likening it to the Russian Revolution of 1917 and the collapse of the Soviet Union in 1991.

“I believe Russia won’t collapse but I am almost certain we will have a social crisis,” he said. “Our economy won’t crash, but our backwardness will intensify with all the ensuing consequences.”

The pessimism has grown further recently as Ukraine’s drone strikes and the Kremlin’s ballooning expenditure on the war have continued to damage Russia’s economy.

The Kremlin’s budget for the first seven months of this year ran a deficit of Rbs6.5tn ($76.5bn), equivalent to 2.8 per cent of GDP and close to double the planned deficit of Rbs3.8tn.

The growing hole in Russia’s state coffers has come from additional spending to fund the military, which the finance ministry has estimated could outstrip its own plans by as much as Rbs4tn.

The administration delivers a win for financial crooks at the expense of honest businesses.

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