Vladimir Putin spends big—and sends Russia’s economy soaring
Vladimir Putin spends big—and sends Russia’s economy soaring
18 comments
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Party today and pay back the dept later, great idea!
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Debt to whom exactly?
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I'm just paraphrasing the article you linked:
How long can the party last? Mr Putin’s attempts to blunt interest-rate rises will lead inflation to rise higher, and last longer, than it would have otherwise. At some point, people may get angry about the rising cost of living. He also cannot run budget deficits for ever. At current rates, Russia’s financial reserves will be exhausted in five years or so; meanwhile, the government faces high borrowing costs. But for now, Mr Putin has a war to win. And so the party goes on.
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18 comments
Decoupling from the West isn’t the economic death sentence it used to be. This gives me hope that one day GCC economies might do the same.
Amusingly, we’re seeing history on repeat here. In the early 20th century, while western economies were becoming increasingly intertwined, the Soviet Union stood apart. As the sole communist state, its trade connections with the capitalist world were minimal. When the Great Depression struck, closely linked economies of the capitalist countries suffered devastating blows, while the Soviet Union’s closed system largely shielded it from the crisis.
In fact, one could argue that the depression even benefited the USSR. Desperate times in the West created a unique labor pool for the Soviets. To fuel their ambitious industrialization plans, they recruited skilled workers, especially from the USA. Engineers, farmers, and industrialists flocked to the USSR, in search of opportunity.
Don't think it's an honest comparison. Russian economy basis is capitalist, with all the downsides it inevitably has. And it's not even "decoupled" either, what with massive imports from China and increasing trade with Iran, plus the still ongoing business with Europe and USA. Heck, Russia is still pumping gas to Europe through Ukraine