RUSSIA IS SPENDING SO MUCH INVADING UKRAINE THAT IT'S A 'HIGH-INCOME' COUNTRY NOW
Russia’s outsized military spending continues to blunt the impact of economic sanctions during its war in Ukraine. The World Bank said that it was upgrading the country’s economic standing to its top-tier “high-income” category from its earlier “upper-middle-income” status, because its gross national income (GNI) per capita increased by 11.2% in the last year.
“Economic activity in Russia was influenced by a large increase in military related activity in 2023, while growth was also boosted by a rebound in trade (+6.8%), the financial sector (+8.7%), and construction (+6.6%),” the organization said. “These factors led to increases in both real (3.6%) and nominal (10.9%) GDP.”
Russia’s upgrade means that it is now viewed as being on the same broad economic level as the United States and western Europe, the countries who have been seeking to punish Russia for its full-scale invasion of Ukraine for two years. The country is now having more trouble selling its crucial oil and natural gas commodities among other products — even titanium airplane components got caught in the fallout. Plus some analysts fear that Russia’s heavy military spending is functionally regressing its economy to the Soviet Union era. Still, the International Monetary Fund said earlier this year that it was doubling its growth expectations for Russia because the sector has been so productive.
Ironically, Ukraine also saw a rating upgrade, from “lower-middle-income to the upper-middle-income.” The story there is that ongoing rebuilding efforts combined with population flight raised per-capita GNI because there’s more economic activity and fewer people to share in its spoils. The only country to see a downgrade this year was Palestine (the “West Bank and Gaza” went from upper-middle-income to lower-middle-income), whose economy has been devastated by Israel’s invasion.
2024-07-05T15:05:00Z dg43tfdfdgfd