The Russian economy is now eating itself to death as Putin's war on Ukraine destroys future capacity, former central bank adviser says [Fortune]
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Source: Fortune
Recommended Video In a recent Economist op-ed , the former Russian central bank adviser drew on a term from mountain climbing when high altitude forces the body to consume itself faster than it can repair itself. “Russia's economy is stuck in what might be described as negative equilibrium: holding itself together while steadily destroying its own future capacity,” she wrote. The economy isn't headed for an imminent crash, but GDP has stagnated, oil revenue has been halved amid Western sanctions, and the government's budget deficit is rapidly draining reserves. At the same time, two economic systems have emerged. One is comprised of the military and related industries that receive priority from the Kremlin. And then there's everything else that's been “left in the cold,” Prokopenko explained. “The most dangerous feature of this new structure is the fuel it burns,” she added. “Russia's economy now runs on what might be called ‘military rent': budget transfers to defense ente
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