The Russian economy is struggling due to the loss of people and limited access to technology, according to International Monetary Fund (IMF) managing director Kristalina Georgieva. She spoke about this issue on CNBC, stating that although high military spending has boosted economic growth, it is not sustainable in the long run.
Georgieva also pointed out that the Russian economy relies heavily on state-funded arms and ammunition production, which masks problems affecting the living standards of Russians. Despite the forecast of 2.6% GDP growth for Russia this year, Georgieva expressed concern about the negative impact of military production on consumption.
Russia-based economists have commented on the poor quality of economic growth, emphasizing that while missiles and shells may contribute to higher GDP, they offer limited benefit to the population. Georgieva also highlighted how sanctions have reduced access to technology and led to a significant outflow of people from Russia, further impacting its economy negatively.
In conclusion, despite appearing positive on paper with a 2.6% GDP growth forecast for Russia this year, there is a bigger story behind it that needs attention from policymakers. The outflow of people and limited access to technology pose a significant threat to Russia’s economy and must be addressed urgently if it wants to sustain its long-term growth prospects.