INSUBCONTINENT EXCLUSIVE:
The pace of Russia's economic growth slowed in the second quarter of 2024, official data showed Friday, amid concerns over stubborn
inflation and warnings of "overheating."Gross domestic product (GDP) dipped from 5.4% in the first quarter to 4% from April to June, the
lowest quarterly result since the start of 2023 but still a sign the economy is expanding.Inflation meanwhile showed no signs of easing,
from the Rosstat statistics agency.The Kremlin has heavily militarized Russia's economy since sending troops into Ukraine in February 2022,
spending huge sums on arms production and on military salaries.That spending boom has fueled economic growth, helping the Kremlin buck
initial predictions of a recession when it was hit with unprecedented Western sanctions in 2022.But it has sent inflation surging at home,
forcing the Central Bank to raise borrowing costs.The Central Bank has aggressively raised interest rates in a bid to cool what it has
warned is an economy growing at unsustainable rates due to the massive increase in government spending on the Ukraine offensive.The bank
security this year, a figure unprecedented since the Soviet era, according to President Vladimir Putin.Moscow's federal budget has meanwhile
rubles ($427 billion) this year.Since so much spending is being directed by the state, which is less responsive to higher borrowing costs,
analysts fear interest rate rises may not be an effective tool against inflation.Consumer prices are a sensitive topic in Russia, where many
people have virtually no savings and memories of hyperinflation and economic instability run deep.
