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.

  • what_is_a_name@lemmy.worldEnglish
    161·
    1 year ago

    Thank the Saudis for that. Since the start of the invasion, the Saudis have been coordinating with Russia in decreasing output to drive oil prices high.

    The US has been subsidising the domestic demand/prices by releasing from its strategic reserves, but last I heard this are about run dry.

    • MrMakabar@slrpnk.netEnglish
      8·
      1 year ago

      The Saudis need the money, due to having to diversify their economy. MBS is starting to take out the Wahhabi elite, but it can backfire. So he needs to pacifiy the crowd. So we see Ronaldo and co going to Saudi Arabia, massive construction projects lining the country and other other massive spending programs. So the Saudis need a high oil price. Pissing of the US is just a nice thing to do, as they did not protect them against Iran, when they attacked a refinery a few years back.

      The best thing to happen, would be a massive economic crisis in China with a strong push towards EVs in the West and especially in the US. It might happen, but right now it looks like Chinas demand is not falling as fast as expected and well the US loves to drive cars as big as WW2 tanks.

      • AngryCommieKender@lemmy.worldEnglish
        4·
        1 year ago

        Not to mention that’s just the strategic reserves. Thanks to shale fracking, the US is the largest petroleum producing country in the world, and that isn’t likely to change any time soon.

    • AllNewTypeFace@leminal.spaceEnglish
      5·
      1 year ago

      It’s in MbS’ interests that his golf buddy/useful idiot Trump wins the presidential election. As such, we can expect oil prices to keep increasing until November 2024, on the theory that significant proportions of Americans will vote against the incumbent primarily out of hip-pocket pain at the pump.