RUSSIAN War Economy is Destroying Russia as Businesses Abandon Customer & Markets for War Effort

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The IMF recently published updated forecasts for Global GDP which show that Russia is forecast to hit 3.2% growth in 2024. At face value this makes the Russian Economy look like one of the strongest in the world however theses figures are misleading and mask what is happening in Russia. The Kremlin is currently pouring Billions of Dollars into the economy to support the war in Ukraine and many businesses have abandoned their customers and markets to provide equipment for the war. In this video I look at this issue in more detail and discuss the short term and long term issues that Russia is facing.

For specific details please check out the CHAPTER list below.

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Chapters:
0:00 Intro
3:20 IMF FORECASTS
5:43 RUBLE
8:59 WAR ECONOMY
12:45 INFLATION
16:16 SUMMARY & CONCLUSION

#russia
#ruble
#ukraine
#imf
#yandex
#braindrain
#uk
#pricecap
#GLOBALFINANCIALCRISIS
#RUBLE
#SWIFT
#RECESSION
#CHINA
#USA
#NATO
#WW3
#WORLDWAR3

[mikebarkhouse]

If Russia and China lie about GDP, how can they even be considered in IMF ratings?

[magikavoncary]

Nazi economy (measured by GDP growth) was strongest in 1944...

Looking solely at GDP might be misleading without considering other factors. Under normal circumstances it would be an important indicator, but in the Russian war economy? Not so much.

[gdutfulkbhh]

Shame on Unilever for dragging their feet. Get out of fascist russia!

[lentinant]

One of the things that would be good to look into is where exactly does russian government get their money to spend into wartime economy. Because that's also a tale worth telling.
1. They spend national wellbeing fund, which was meant to back up budget when paying up pensions. The fund is almost dried up, and will definitely not be used for the target goal anymore.
2. They do everything they can to cut more money from various businesses. Like "excessive income tax". This drastically reduces amount of money businesses can invest into their expansion.
3. The plan to increase the tax for everyone is also meant specifically to get more money for the war.
4. They keep printing new money which in turn keeps increasing inflation.
5. They've redesigned budget to spend a lot of it on the war, which means, a lot of other areas are not going to get enough money to survive.

All of those points are very likely to contribute to snowballing effect of the economic decline in the future.

A lot of russian (I stress it out again - russian, not other countries) politicians who are related to private business are horrified by the perspectives they have. Aside of reports, you could watch their meetups and listen to their concerns because there are plenty. But the government will do nothing to address those - the war is more important for them than their country wellbeing.

[davidcobb]

The IMF looks at gdp without looking at its components: Consumption, Investment, Government Spending, and Net Exports. It is unsustainable to only have government spending on non-productive assets.

[DeviousDumplin]

Building military hardware to boost your GDP is a classic example of the broken windows fallacy in economics. The classic fallacy is a story from a French economist, Bastiat. A boy breaks a window. The townspeople looking on decide that the boy has actually done the community a service because his father will have to pay the town's glazier to replace the broken pane. The glazier will then spend the extra money on something else, jump-starting the local economy. The onlookers come to believe that breaking windows stimulates the economy.

By forcing his father to pay for a window, the boy has reduced his father's disposable income. His father will not be able to purchase new shoes or some other luxury goods. Productivity has also decreased, as the time the father spends dealing with the broken window could have been put to better use. Thus, the broken window might help the glazier, but at the same time, it robs other industries and reduces the amount spent on other goods.

The townspeople should have regarded the broken window as a loss of some of the town's real value. Moreover, replacing something that has already been purchased represents a maintenance cost, not a purchase of new goods, and maintenance doesn't stimulate production. In short, Bastiat suggests that destruction doesn't pay in an economic sense.

So, it's ironic that the IMF would behave like the townspeople in this case, and not like the 19th century economist Bastiat. It's maybe the most basic rule in economics, and you learn about it very early on in your schooling.

[planetmikusha]

I talked to an engineering manager at a technology company in Russia, and he said it was expensive and difficult to find workers to build his firm's communications systems. Many skilled workers left the country, some were mobilized, and many more switched over to government jobs which exempts men from military mobilization.

[Ploobstill]

Thank you so much for doing this Joe. I thought of you as soon as I read that IMF article.

[hkuiper]

I expect to see the IMF members buying rubles and investing in Russia. Not!! Who are these people?

[geofwassell]

Mars group are operating in Russia. We have stopped buying Mars group products. This isn't just confectionary, it is also petfood products and brands like uncle bens and dolmio. Also, Pepsi seem to be operating in Russia too. I sincerely hope that these companies learn the error of their ways.

[LEVATHYN]

The US set to vote on 60 billion in military aid this weekend, arriving to the front lines in under two weeks. This is not gonna be a good year for the Russian federation.

[steveharris]

No one in their right mind would rely on the IMF to tell them the correct time of day.

[hybridarmyoffreeworld]

Yes. Seems to me there should be more explicit emphasis that US support for Ukraine is a national security issue, not a “foreign aid” issue.

[bobbrown]

Thanks for all the hard work and effort you put into these videos, the data you have to sift through and make it entertaining is not easy.

[reinhardsterlika]

wonderful job you do Joe! Slava Ukraini!

[wayneraven]

Mr. Joe Bloggs.thankyou for putting into sense for us Laymen, or Joe Bloggses.

[bramvanderheijden]

And here's something to put a smile on your face!

[chimneydriptray]

All that Russian oil and gas money being wasted on war because of a bunch of old men’s egos.

[dprout]

Will your video put a smile on IMF experts faces. Thank you Joe, I dearly hope you are right.

[ben_jam]

The worrying think is, in the right now, Russia still has an overwhelming military advantage. Plus stockpiles of missiles and artillery, poor Ukraine is getting bombed into submission and need help asap !!