INSUBCONTINENT EXCLUSIVE:
grapples with the economic consequences of its war in Ukraine
GDP growth reached 4.4% in the second quarter of 2024, with unemployment at a low 2.4%.However, this growth comes at a cost
The government has increased spending by nearly 50% since 2021, primarily on defense and security sectors.Russia Hikes Interest Rate to 19%
as War Spending Fuels Inflation
(Photo Internet reproduction)In 2024, Russia plans to allocate 40% of its budget to military expenditure, up from 14-16% before 2022
This imbalance fuels inflationary pressures.Labor shortages exacerbate the problem
The defense industry alone lacks an estimated 400,000 workers, driving up wages across sectors.To fund increased spending, Russia plans a
major tax overhaul in 2025
This includes raising the corporate profit tax from 20% to 25%.The government projects these changes will generate an additional 2.6
trillion rubles ($29.1 billion) in revenue
aggressive rate hikes aim to cool the economy and curb inflation
Yet, with continued military spending, achieving price stability remains a formidable challenge.As Russia walks this economic tightrope, the
global community watches closely
