Will hit economy: Putin wants to nearly double defense spending – Bloomberg

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The publication writes that Vladimir Putin greatly aggravated the situation with the production and budget deficit in the Russian Federation. The mobilization announced thus led to a large migration of personnel abroad.

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Russian President Vladimir Putin will spend much more on his armed forces over the next two years than previously thought. Thus, the Russian Federation began to adapt its budget to the needs of the war with Ukraine, as Bloomberg wrote.

The publication writes that now defense spending must exceed the initial budget estimates for next year by more than 43%, while the corresponding categories of national security and law enforcement will grow by more than 40%.

Journalists write that budget estimates have changed as priorities change in favor of the armed forces.

The Stockholm International Peace Research Institute (SIPRI) estimates that the “national defense” item in Russia’s budget accounts for about three-quarters of its total military spending. The budget plan provides for annual conscription spending of about 16 billion rubles in 2023 and 16.5 billion rubles in 2024-2025. Most other details of military spending remain confidential.

According to economist Alexander Isakov, according to the institute, mobilization will hit production first and foremost. The decrease is expected to be around 3.75%. The fact is that the workforce will be significantly reduced, as mobilization leads to the so-called “brain drain” to safe places and other countries. In fact, the same thing is repeated as in February, when the Russian Federation began an extensive invasion of Ukraine.

Journalists write that according to the latest forecasts, the budget deficit of the Russian Federation will rise from 0.9% in 2022 to 2% of GDP next year. The government will finance the deficit mainly with debt and reserves. The plan also includes borrowing up to $1 billion a year in foreign currency.

Previously Focus He reported that Putin’s new threats are forcing the European Union to significantly tighten sanctions. Journalists write that the plan to limit oil prices may face many obstacles. But if the decision is made, Moscow should hit its revenues hard.

We also remember that European production was transferred to the USA due to high energy prices. Europe may enter an era of deindustrialisation, as the US working environment appears much more benign, especially for manufacturers in the chemical, steel and other energy-intensive industries.

Source: Riafan

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