Russia's GDP does not indicate real state of economic situation - analyst Pavytska

She spoke about this on Espreso TV.

"I emphasize that it would be wrong to draw conclusions about the state of the economic situation in Russia based on their GDP figures alone. Because the figures of Russian GDP that we observe are the result of a fiscal stimulus from extremely high government spending that finances the state military-political complex. Under such conditions, GDP growth is not normal. After all, such growth is of poor quality and devoid of any investment. In other words, everything generated by the military-industrial complex is promptly destroyed on the front line. Today, the big question is how the Russian economy will react when this fiscal impetus ends," Pavytska explained.

The analyst noted that the sanctions pressure on the Russian economy should continue.

"As for the effectiveness of sanctions against Russia, at the beginning of the full-scale invasion, expectations from them were significantly overestimated. It is also worth noting that there has been no communication on how sanctions against Russia will work over time. When sanctions are introduced, they are most effective at the beginning, but then the Russian economy adapts to them. That is why it is very important that the countries of the sanctions coalition continue to put pressure on the Russian economy," she added.

• On July 31, media reported that China had adjusted export controls over military UAVs after a visit to Beijing by Ukrainian Foreign Minister Dmytro Kuleba.
• On August 8, Reuters reported that Russia and China may start using barter trade in the autumn as they seek to limit the use of banking systems controlled by the United States.