Russia to grow faster than all advanced economies says IMF
Russia to grow faster than all advanced economies says IMF
The IMF estimates Russia's economy will grow faster than the likes of the US, UK and Germany this year.
You're viewing a single thread.
Doesn't massive investment into the military present generate an enormous, but false, short-term economic boost that quickly dissipates as the military has very little economic follow-through?
How did you think the US got out of the Great Depression?
A lot of people say the New Deal, but that was only part of it, and in fact by 1937 FDR was on the verge of reintroducing austerity again.
The war economy during WWII got the US out of the Great Depression. Every single automobile plant in America was turned into a war factory overnight. Record unemployment fell to zero, and the American citizens registered one of the highest increase in living standards soon after the Great Depression that went well into the 1950s and 60s, one that would not be repeated in their history again.
You see, when a state puts in a huge order, military or not, it is spending a lot of money out of thin air. Those money spent will naturally flow into the hands of the companies, and then the workers they hired in the sector. With more income to spend, they will go to the local grocery stores and buy more stuff on the way home. This drives up demand and stimulates the local economy.
It doesn’t where the money is spent on. You can spend a huge ton of money on military but the excess money will eventually circulate into the economy itself.
The problem with Western neoliberal economies is that most of those money went to the stock market, real estate (including when you’re paying rent), debt repayment instead of going into the real sector of the economy.
It doesn't have to be, military factories that produce military equipment can be converted into civilian factories that produce civilian commodities.
The argument that Russian economy is primarily growing due to military spending doesn't really have any basis in reality.
But you post this as a source, which quite literally states that the growth is coming from oil exports, and increasingly high levels of government spending (One can only wonder towards what). So is the source wrong?
If you go the IMF source this is drawing from, along with the Carniege Endowment shudder, both those sources that the BBC are drawing from describe the increase as coming from surging prices in oil and government investment into the MIC.
This increase also follows nearly a year of negative GDP growth in 2022, so if anything, Russia is simply regaining already lost ground.
https://www.statista.com/statistics/1009056/gdp-growth-rate-russia/
Russia’s manufacturing PMI index is on a 18-year record high.
This goes beyond just regaining lost ground, this is a dramatic shift towards re-industrialization to curb the effects of foreign sanctions, including the establishing of new supply chain and trade routes (most notably towards the Far East with China, and with Iran) that naturally stimulate growth in previously neglected regions.
One sector that has slowly been declining though, is the mining industry. All other metrics including industrial output, construction, freight turnover, retail, agriculture, electrical consumption (a metric for economic activity) etc. are all trending up.
The reality is that the MIC is a relatively small part of the overall economy, so it logically cannot account of majority of the growth. What's actually happening is that all the western companies leaving Russia along with the sanctions created a lot of business niches that didn't exist before. Domestic businesses are now filling these niches to meet demand. Russian economy is becoming restructured to be a lot more self sufficient as a result, and this is a very positive thing for Russia in the long run.