BBC predicts Russia’s economic growth may be short-lived despite recent success

Russia’s War Economy Booms, But Will It Sustain in the Long Run?

Russia’s economy has grown in 2023, thanks to its shift to a mobilized war economy under Putin’s leadership. However, BBC economics editor Faisal Islam has warned that the Kremlin will ultimately face a systemic collapse in the long term.

The Russian state has significantly increased its spending, particularly in military and security sectors, reminiscent of the late-Soviet era. This has come at the expense of support for other areas of the population, as funding has been redirected towards the production of tanks, missile systems, and defenses in occupied Ukraine.

Despite facing oil sanctions, Russia has managed to sustain its economy by using a “shadow fleet” to transport oil to India and China, effectively circumventing the sanctions. Moreover, the country’s petroleum taxes have exceeded pre-war levels, and the ongoing foreign exchange flow from oil, gas, and diamonds has helped alleviate pressure on the value of the rouble.

Looking ahead, while Western leaders have expressed skepticism about Russia’s current economic situation due to its reliance on oil and gas exports and increasing competition from other producers. Additionally, Russia’s competitors are expected to increase production as demand for oil and gas is expected to peak soon. Furthermore

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