Russia’s out-of-control military spending. With spending on the war in Ukraine potentially accounting for 45% of Russia’s budget by the end of the year, what are the implications for the rest of the economy? — Novaya Gazeta Europe
novayagazeta.eu
The Russian economy has been profoundly affected by the war in Ukraine, with the 37% of national spending that currently goes on defence predicted to rise to as much as 45% by the year’s end. As well as contributing to the ruble’s continuing fall, the massive increase in military spending is creating wider problems for the country’s economy that risk repeating the mistakes of the past.

In the first six months of 2023, total budget expenditure rose to almost 15 trillion rubles (€142.3 billion), an increase of 2.5 trillion rubles (€23.7 billion) on the previous year, with defence spending responsible for almost the entire difference, economic analyst Boris Grozovsky says. The Russian government has simultaneously increased military spending while decreasing spending in other sectors, which is “why budget statistics are no longer being released,” Grozovsky added.

  • severien@lemmy.worldEnglish
    0·
    1 year ago

    If Austria is really financing the war, then only if Russia used that money to buy war stuff from elsewhere

    Does not compute. Money from Europe helps financing the war even if it’s domestic production. Money is fungible, you can’t say this specific euro or ruble is not used for weapons and therefore it’s ok to pay them. Western business helps prop up ruble exchange rate which limits inflation and domestic discontent, which allows Putin to spend more on domestic weapon production.