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"Pretty much what Soviet Union used to look like": IMF assesses Russia's economy

13 February, 2024 Tuesday
14:18

Managing Director of the International Monetary Fund Kristalina Georgieva believes that the Russian economy is not as good as the Kremlin claims

She made the statement in an interview with CNBC.

Georgieva reminded that defense and security spending this year will account for about 40% of Russia's total budget expenditures. However, Moscow is already facing problems due to sanctions and the outflow of qualified personnel.

"This is a war economy in which the state — which let’s remember, had a very sizeable buffer, built over many years of fiscal discipline — is investing in this war economy. If you look at Russia, today, production goes up, military, consumption goes down. And that is pretty much what the Soviet Union used to look like. High level of production, low level of consumption," the IMF director said.

According to her, about 800,000 people have left Russia, some of whom are scientists and representatives of the IT sector.

"I actually think that the Russian economy is in for very tough times because of the outflow of people, and because of the reduced access to technology that comes with the sanctions. So although this number looks like a good number, there is a bigger story behind that, and it’s not a very good story," Georgieva said.

  • According to Forbes, the cost of one day of the large-scale war with Ukraine for Russia is about $300 million. In total, Russia has spent more than $167 billion over the past year and a half.

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