Russia’s ‘overheating’ economy to slow sharply next year, says central bank. Worsening labour shortages and western sanctions are crimping production

7 comments

1. Crimping…?

2. If paywalled: https://archive.ph/At8Uq

3. Now Putin reacently held a televisied speech where growth in economy is projected to increase 9.2 percent for this year. Now Everything this stoge is saying is reaching the dumbest economist in the world comment on strong figures that is total bs. They are collapsing fast and this is the truth!

4. Economically they are at a point where they can’t afford to stop the war, because right now the only thing that keeps their house-of-cards economy from collapsing is their war spending.

5. Oh cool, more copium on why the current insufficient supply is just right actually and Ukraine doesn’t need more help

6. “… Rapid growth, expected to hit 3.5 to 4 per cent this year, has been driven primarily by strong domestic demand from consumers and the state, which has outpaced supply, the CBR (Central Bank of Russia) said in its annual report. …”
   .
   Domestic demand …
   Well, you can also declare the expenses for a funeral as “earthworks”.
   Also armaments expenditure is domestic demand in the case of Russia.
   .
   From an article from the Russian news site “Novye Izvestiya”
   (I’m again not sure about their relevance or reputation):
   «Куда растет российская экономика?»: цифры от Путина не повлияют на доходы россиян

   “(Towards) Where is the Russian economy growing?”: figures from Putin won’t affect Russians’ incomes
   August 27, 2024, 09:55
   Russian President Vladimir Putin said at a meeting on economic issues on Monday
   that the country’s GDP grew by 4.6% in annualized terms in the first six months of 2024.
   “NI” analyzed what was the main factor of growth and what difficulties the economy may face
   in the near future.
   …
   International institutions have also noted the increase in the growth rate of the
   Russian economy for the second year in a row.
   In mid-February, IMF deputy chief Gita Gopinath in an interview for Foreign Policy
   explained the growth of the Russian economy by increased spending on the
   **military-industrial complex** and significant social payments.
   …
   “In general, GDP is not a very adequate indicator by which to measure economic growth.
   A bridge is built – that’s GDP, a bridge is destroyed – that’s also GDP.
   A prison is being built – this is also GDP,” the expert said. –
   But it does not matter to the population.
   In principle, raising GDP by 2-4% is a task that can be solved ~~in one or two steps~~ (“раз-два” IMHO in next to no time).
   …
   At the same time, according to Rosstat, inflation is outpacing the growth rate of household incomes.
   In May it amounted to 8.3%, and in June it has already risen to 8.59% in annual terms.
   These figures outpace the rate of increase in household incomes.
   …
   According to him, the Keynesian model of economic growth, which implies significant budget injections,
   can provide GDP growth within one year, maximum two years.
   Then it will be necessary to apply other tools.

   A number of foreign experts at the end of 2023 called Russia’s current
   economic growth model “military Keynesianism.”
   …
   According to the Ministry of Finance, defense and security spending in 2024
   will amount to 14.2 trillion rubles – 38.6% of the budget.
   Of this, Br10.8 trillion will be spent on defense (6.4 trillion rubles in 2023) and
   3.4 trillion rubles on security (3.2 trillion rubles a year earlier).

   Social spending will account for 30% of all expenditures. Of these, 7.7 trillion rubles
   will be spent on social policy, 1.6 trillion rubles on education,
   the same amount on healthcare, 0.2 trillion rubles on culture and 0.07 trillion rubles on sports.”

7. Such is the ultimate outcome of a wartime economy. It works in the short term because everything and the kitchen sink is thrown into propping it up, but it has longterm consequences.