As of: January 30, 2024, 3:25 p.m
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The Kremlin in Moscow: The Russian war economy is in danger of overheating.
© Bai Xueqi/dpa
The war in Ukraine boosted the Russian economy.
But now the war economy, the great engine of the upswing, is threatening to overheat.
Experts say you can already see the first smoke.
Vienna - According to a forecast, the Russian economy, fueled by the arms boom, can no longer continue its rapid growth.
“It is now operating at the limit of its capacity and is showing increasing signs of overheating,” said the Vienna Institute for International Economic Studies (WIIW) on Tuesday.
According to the think tank specializing in Eastern Europe, the economy expanded by 3.5 percent last year.
Because of high inflation and key interest rates that have been raised to 16 percent, the WIIW only expects growth of 1.5 percent this year.
Expert warns: “Russia’s economy is dependent on the continuation of the war”
“Russia is increasingly dependent on the war in Ukraine continuing.
The enormous spending on this acts like a drug on the economy,” said Vasily Astrov, a Russia expert at WIIW.
It was said that around 29 percent of the federal budget would flow into the defense budget this year.
The WIIW reduced its growth forecast for Ukraine, which is suffering from the Russian war of aggression, by 1.2 percentage points to 3 percent this year.
A possible victory for Donald Trump in the US presidential election would make the future of Western financial aid for Ukraine more uncertain, the institute argued.
(dpa, lf)