The Russian economy is facing a difficult time due to the outflow of people and a lack of technology, according to International Monetary Fund Executive Director Kristalina Georgieva. She explained that the high military spending has fueled economic growth, but Russia’s economy relies heavily on state-funded arms and ammunition production, which masks problems affecting Russians’ living standards.

Georgieva spoke to CNBC about the IMF’s forecast for Russia’s GDP growth of 2.6 percent this year, noting that this means that the Russian state is investing in a war economy. She expressed concern that in Russia, military production is increasing and consumption is decreasing, creating a situation similar to what the Soviet Union experienced with high production and low consumption.

The Russian economy has rebounded sharply from a slump in 2022, resulting in growth of 3.6% in 2023, after a contraction of 1.2% the previous year. However, Russian economists have commented on the poor quality of this economic growth, noting that while missiles and shells may contribute to higher GDP, they offer limited benefits to the population. Georgieva also pointed out that the Russian economy is facing difficult times due to the outflow of people and reduced access to technology as a result of the sanctions. Despite the seemingly positive forecast for GDP growth of 2.6 percent

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