It would take Russia 108 years to fully occupy Ukraine at current rate – The Economist

The Economist's analysis indicates Russia's military offensive in Ukraine is progressing at an extremely slow and costly pace, with current projections suggesting it would take until 2030 to fully occupy the four claimed Ukrainian oblasts and over a century for the entire country, having gained only 0.4% of territory since May. This minimal progress has incurred immense human cost, with Russian casualties estimated between 984,000 and 1,438,000, including up to 480,000 dead. The report suggests that a sudden Russian breakthrough is unlikely, and continued Western support for Ukraine could lead to a prolonged, attritional conflict where a collapse of Russia's war economy becomes a more probable outcome than a Ukrainian defensive failure.

Analysis

The Economist's analysis indicates Russia's military offensive in Ukraine is progressing at an exceptionally slow and costly pace. Projections suggest it would take until June 2030 to fully occupy the four claimed Ukrainian oblasts, and over a century for the entire country, having captured only 0.4% of territory since May. This minimal territorial gain comes at a severe human cost, with Russian casualties estimated between 984,000 and 1,438,000, including up to 480,000 dead by October 13.

The report highlights a strategic stalemate, noting that battle lines have barely moved since October 2022 and no large cities have changed hands. A sudden Russian breakthrough is deemed unlikely due to advanced surveillance and precision weaponry, making massed forces suicidal. While incremental successes are possible, they are achieved at an enormous cost, suggesting a prolonged war of attrition.

The ongoing conflict, if Western backing for Ukraine persists, is expected to continue with Russia gaining ground only slowly. The Economist suggests Russia's capacity to sustain the current pace of fighting may be diminishing. Consequently, a collapse in Russia's war economy is considered a more probable outcome than a failure of Ukraine's defensive lines, posing a significant long-term risk for Moscow.

Key Decisions for Investors

• Investors should closely monitor the sustainability and extent of Western military and financial support for Ukraine, as its continuation is a key determinant for the conflict's attritional trajectory.
• Evaluate the persistent geopolitical risk premium across global markets, particularly for energy and commodity-related assets, given the protracted nature of the conflict and potential for Russian economic instability.
• Assess long-term investment implications for Russian-exposed assets, considering the increasing probability of a war economy collapse cited by The Economist as a significant downside risk.