INSUBCONTINENT EXCLUSIVE:
Russia's economy grew 5.4% in the first quarter of 2024, official statistics published Friday showed, as President Vladimir Putin denied
military spending on his Ukraine offensive was reaching unsustainable levels.The Kremlin has heavily militarized Russia's economy since
sending troops into Ukraine in February 2022, with the vast outlays helping to power growth and cushion the blow of Western sanctions.But it
has also set off inflation and comparisons with runaway defense spending that hobbled the Soviet Union in the 1980s.The Rosstat statistics
agency said the first quarter growth was up from 4.9% in the fourth quarter of last year.The inflation rate also picked up over the month,
unsustainable levels."It is not critical yet
In the Soviet Union in 1985-1986, defense spending was 13%" of GDP, he said."Taking into account the state of the economy, macroeconomic
indicators and budget revenue forecasts, combined defense and security spending of eight-and-a-bit percent is not critical," he
added.Earlier in the week, Putin had said Russia's military spending was a "great resource" that should be used "carefully and
effectively."He said Friday that experts believe Russia's state finances still have room to accommodate even higher expenditure.Russian
troops last week launched a major new offensive on Ukraine's northeastern Kharkiv region
Putin has signaled he sees Moscow's path to victory on the battlefield by outspending Ukraine and its Western backers.The reorientation of
Russia's crucial energy exports to the likes of China and India has helped it weather Western sanctions that many analysts predicted would
push Russia into a deep recession.China has become Russia's most important economic ally over the last two years.Putin on Friday blasted U.S
attempts to put pressure on Beijing over its ties with Moscow.He called U.S
threats of sanctions on Chinese banks and companies that deal with Russia "illegitimate" and said lenders in both countries were working to
overcome problems with cross-border payments.The United States has targeted companies in third countries, including China, that it says are
helping Russia purchase sanctioned goods for its military.While helping to secure strong headline growth, Russia's increased military
analysts' expectations and further from the government's official 4.0% target.The Central Bank has hiked its key interest rate to 16% in a
Many young men have been drafted, left the country or recruited by the booming weapons industry.
