Military Spending Pushes Russian Economic Growth Up

Russia's economy grew 5.4 percent in the first quarter of 2024, official statistics published Friday showed, as President Vladimir Putin denied military spending on his Ukraine offensive was reaching unsustainable levels

Moscow, (APP - UrduPoint / Pakistan Point News - 17th May, 2024) Russia's economy grew 5.4 percent in the first quarter of 2024, official statistics published Friday showed, as President Vladimir Putin denied military spending on his Ukraine offensive was reaching unsustainable levels.

The Kremlin has heavily militarised Russia's economy since sending troops into Ukraine in February 2022, with the vast outlays helping to power growth and cushion the blow of Western sanctions.

But it has also set off inflation and comparisons with runaway defence spending that hobbled the Soviet Union in the 1980s.

The Rosstat statistics agency said the first quarter growth was up from 4.9 percent in the fourth quarter of last year.

The inflation rate also picked up over the month, however, to 7.8 percent.

On a state visit to China, Putin denied that Russia's vast military spending -- which he said had passed eight percent of GDP -- had hit unsustainable levels.

"It is not critical yet. In the Soviet Union in 1985-1986, defence spending was 13 percent" of GDP, he said.

"Taking into account the state of the economy, macroeconomic indicators and budget revenue forecasts, combined defence and security spending of eight-and-a-bit percent is not critical," he added.

Earlier in the week, Putin had said Russia's military spending was a "great resource" that should be used "carefully and effectively."

He said Friday that experts believe Russia's state finances still have room to accomodate even higher expenditure.

Russian troops last week launched a major new offensive on Ukraine's northeastern Kharkiv region. Putin has signalled he sees Moscow's path to victory on the battlefield by outspending Ukraine and its Western backers.