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Russia to spend over $100 billion from new budget on war against Ukraine — economist Neskhodovskyi

4 December, 2023 Monday
09:58

Russia’s new budget for the next three years significantly increases expenditures related to the Ministry of Defense. Over $100 billion from the new Russian budget will be spent on the war against Ukraine

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Economic expert Ilya Neskhodovskyi shared the information on Espreso TV.

"More than $100 billion will be spent directly on army supplies, logistics and weapons production. This is a serious challenge because the Ukrainian budget is much smaller. Without the help of international partners, it is a challenge (for Ukraine - ed.)," he said.

According to the expert, the support of international partners is crucial for Ukraine's victory in the war against Russia.

"We have to tell our international partners about this. If they fulfill their obligations to supply shells, weapons, F-16s, etc., then this is a declaration of victory. If not, it is a positional, long war," he said.

On the other hand, the figures mentioned in Russia’s new budget are somewhat surprising. The question arises as to how the budget targets will be achieved, since there are no resources to fill the Russian budget, Neskhodovskyi noted.

"Throughout 2023, the Russians manipulated certain figures, played with local budgets, the federal budget, additional taxation, compensation for gasoline prices, etc. So how will these revenues be used to finance the war? In my opinion, there is no answer to this question, because the only option is devaluation and significant inflation," he emphasized.

"If inflation is significantly higher than the rate they have set, then they will be able to fulfill this budget in ruble terms. However, this will result in the population becoming poorer. In addition, next year is an election year, and in March 2024, the population needs to be bribed. In other words, this budget has completely different objectives. How they will fulfill them is a big question, as is whether this budget is realistic," Neskhodovskyi added.

  • The documents of the Russian Ministry of Finance, according to which in 2024 the Kremlin is going to spend 30% of total state budget expenditures on the war, indicate that Russia is preparing for a multi-year war against Ukraine.
  • Russian budget expenditures are becoming increasingly focused on the war against Ukraine. However, their constant increase is expected to contribute to inflationary pressures within Russia.
  • Diplomat, Minister of Foreign Affairs of Ukraine (2007-2009) Volodymyr Ohryzko, commenting on the record growth of spending on the Russian army, noted that the Russian economy would be undermined by such a burden.
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