Russia's Economy Overheats as Putin Prioritizes Ukraine War
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Russia's economy is overheating due to soaring government spending on the war in Ukraine, with defense spending doubling and fiscal stimulus equal to 5% of GDP.
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Real-time data shows strong economic growth, with forecasts of 3.3% GDP growth in 2023, but the economy likely can't sustain this.
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Inflation is accelerating, hitting 7.5% in November, causing the Central Bank to aggressively raise interest rates.
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Extremely low unemployment below 3% and 15% annual wage growth are further overheating the economy.
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The Economist concludes Putin's desire to win in Ukraine outweighs concerns about economic stability, portending even faster inflation.