Russian government spending is at unprecedented levels and about 40% of the state budget is spent on war.
Russia’s economic dependence on military spending has reached such a level that it can neither win nor lose a war. This was said in the material of The Conversation on Saturday, February 24.
It indicates that GDP is growing in Russia. So, according to the Russian government, in the third quarter of 2023 it will reach 5.5% year-on-year, which is much larger than the UK (0.6%) and the EU (0.9%). Also, Russia’s budget deficit (the amount the government must borrow) will remain below 1% of GDP, compared to 5.1% in the UK and 2.8% in the EU.
As experts point out, this phenomenon has a simple explanation. And it’s not about the latest technologies or the general increase in the well-being of Russians, but about massive military spending.
“About 40% of Russia’s state budget is spent on war. And this year the Kremlin plans to spend a record 36.6 trillion rubles, or $386 billion, on defense. Moreover, if Russia wins the war , the costs of restoring and maintaining security in the occupied part of Ukraine will be too high, and Russia’s isolation will not allow the economy to grow,” said Renaud Foucart, an economics lecturer at Lancaster University.
He points out that a prolonged stalemate may be the only solution for Russia to avoid a complete economic collapse.
“The Russian regime has no incentive to end the war and face economic reality. Therefore, it cannot afford to win the war, but it cannot afford to lose it either. Its economy is now fully committed to continuing the deadly conflict,” said Renaud Foucart.
We remind you that inflation in Russia at the end of 2023 will reach 7.4%.
Russian President Vladimir Putin called Russia’s economy “number one” in Europe. According to him, in terms of purchasing power parity, Russians are ahead of all of Europe, but “per capita we still have to try.”
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.