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Even at war and cut off from the world the Russian economy is growing. Driving by buoyant commodity prices. They have tech for civilian aviation in their massi

Even at war and cut off from the world the Russian economy is growing. Driving by buoyant commodity prices. They have tech for civilian aviation in their massive military industry. And just the sheer size of the country guarantees the demand.

dralley 2y ago
The economy is growing because of massive government expenditures on defense. The same thing happened with Nazi Germany. It's not sustainable. "Buoyant commodity prices" is also known as inflation. They have high inflation despite having a federal interest rate of 18%, which is sky high. Not great signs for their economy.
- HPsquared 2y ago
  Silicon Valley was built on defense spending.
  - brnt 2y ago
    Nobody is interested in 1970’s airliners though.
    - HPsquared 2y ago
      In that part of the world, if those are the only ones available...
      - brnt 2y ago
        Then it aint no Silicon Valley.
  - signatoremo 2y ago
    Not at the same scale. At the peak of the Vietnam War, the US spent less than 10% of GDP on the war. Most of the time it was only half of that (for comparison it’s less than 3% at the moment). Russia currently spend about 40% of the GDP on Ukraine war ( coming off my memory, may not be 100% accurate). That can’t be sustainable and they will have long lasting impact.
    - racional 2y ago
      The figure I've seen for Russia's spend is 40% of its budget, not its GDP. More like about 10 percent of GDP. Still an insane amount, for a war that has been obviously insane from the very beginning. But a different number, in any case.
    - cpursley 2y ago
      It's 6% which is not a dealbreaker for a country with one of the lowest GDP to Debt ratios (assuming the war does not stretch for another 5 years). https://carnegieendowment.org/russia-eurasia/politika/2023/09/russias-2024-budget-shows-its-planning-for-a-long-war-in-ukraine?lang=en https://carnegieendowment.org/russia-eurasia/politika/2023/0...
      - dralley 2y ago
        They have low debt but little ability to borrow. Once they run out of reserves they won't be able to sustain these levels of funding.
        cpursley 2y ago
        Why would they need to borrow when they can continue to sell commodities (which the EU and US continue to buy, btw)? Besides, there's no indication that they are running out of reserves. Wasn't one of Putins first moves to get off of foreign debt?
        dralley 2y ago
        Those commodities won't even come close to covering their spending spree. And their reserves are running dry very quickly. Likely by the end of this year.
        deleted 2y ago
        [deleted]
        cpursley 2y ago
  - treflop 2y ago
    Even if it was, many of the products that came out were not defense products. Nazi Germany spent defense money to build defense products. The war was going to end eventually. Like spending too much money on remote work products during a pandemic that will eventually end. It’s going to blow up.
phonon 2y ago
Russia's GDP is a bit more than half of California's. Civil aviation there is a few hundred planes (about the size of Southwest--in total), and is heavily government subsidized. https://www.reuters.com/business/aerospace-defense/russia-splashes-12-bln-keep-aviation-sector-air-2023-12-21/ https://www.reuters.com/business/aerospace-defense/russia-sp...
- cpursley 2y ago
  The reason they dipped in terms of planes is directly related to sanctions and western countries pulling out based on the article you shared. Worth noting, the foreign parts Sukhoi Superjet 100 (a very good regional jet) are in the process of being fully "Russified" and the MC-21 is actually a true domestic plane vs the Chinese C-919: - https://aviacionline.com/2022/05/sukhoi-tests-100-russian-aviadvigatel-pd-8-engine-on-an-ilyushin-il-76/ https://aviacionline.com/2022/05/sukhoi-tests-100-russian-av... - https://www.youtube.com/watch?v=E32TCdBgkoY https://www.youtube.com/watch?v=E32TCdBgkoY Also, Russia just surpassed Japan to become #4 in terms of GDP PPP (the number that matters), was recently reclassified as a high-income county and is expected to experience relatively high GDP growth, and that's even under the heaviest sanction regime on the planet x3 and after getting cut off from SWIFT: https://www.worldbank.org/en/about/leadership/directors/eds23/brief/russia-was-classified-as-high-income-country https://www.worldbank.org/en/about/leadership/directors/eds2...
  - sofixa 2y ago
    > Worth noting, the foreign parts Sukhoi Superjet 100 (a very good regional jet) A very good based on what measurement? Operators have complained about extremely poor reliability, and there have been a high amount of crashes. > and the MC-21 is actually a true domestic plane vs the Chinese C-919: The MS-21 isn't domestic, it uses Western avionics and engines. There's a russified version which is supposed to be launched in 2025-2026, but it's unknown if that would happen considering it's using the Aviadvigatel PD-14 engines which are still undergoing design refinement and testing. It could literally be years before the engines are ready, so when the jet enters service is anyone's guess. > Also, Russia just surpassed Japan to become #4 in terms of GDP PPP (the number that matters), was recently reclassified as a high-income county and is expected to experience relatively high GDP growth, and that's even under the heaviest sanction regime on the planet x3 and after getting cut off from SWIFT: A big issue with these metrics is that they use the official exchange rate for RUB to USD exchange rate, which is entirely theoretical since it's impossible to trade the two due to the sanctions. The real exchange rate is probably much worse for the RUB, so these metrics based on the official theoretical one are highly misleading.

dralley 2y ago

The economy is growing because of massive government expenditures on defense. The same thing happened with Nazi Germany. It's not sustainable. "Buoyant commodity prices" is also known as inflation. They have high inflation despite having a federal interest rate of 18%, which is sky high. Not great signs for their economy.

HPsquared 2y ago
Silicon Valley was built on defense spending.
- brnt 2y ago
  Nobody is interested in 1970’s airliners though.
  - HPsquared 2y ago
    In that part of the world, if those are the only ones available...
    - brnt 2y ago
      Then it aint no Silicon Valley.
- signatoremo 2y ago
  Not at the same scale. At the peak of the Vietnam War, the US spent less than 10% of GDP on the war. Most of the time it was only half of that (for comparison it’s less than 3% at the moment). Russia currently spend about 40% of the GDP on Ukraine war ( coming off my memory, may not be 100% accurate). That can’t be sustainable and they will have long lasting impact.
  - racional 2y ago
    The figure I've seen for Russia's spend is 40% of its budget, not its GDP. More like about 10 percent of GDP. Still an insane amount, for a war that has been obviously insane from the very beginning. But a different number, in any case.
  - cpursley 2y ago
    It's 6% which is not a dealbreaker for a country with one of the lowest GDP to Debt ratios (assuming the war does not stretch for another 5 years). https://carnegieendowment.org/russia-eurasia/politika/2023/09/russias-2024-budget-shows-its-planning-for-a-long-war-in-ukraine?lang=en https://carnegieendowment.org/russia-eurasia/politika/2023/0...
    - dralley 2y ago
      They have low debt but little ability to borrow. Once they run out of reserves they won't be able to sustain these levels of funding.
      - cpursley 2y ago
        Why would they need to borrow when they can continue to sell commodities (which the EU and US continue to buy, btw)? Besides, there's no indication that they are running out of reserves. Wasn't one of Putins first moves to get off of foreign debt?
        dralley 2y ago
        Those commodities won't even come close to covering their spending spree. And their reserves are running dry very quickly. Likely by the end of this year.
        deleted 2y ago
        [deleted]
        cpursley 2y ago
- treflop 2y ago
  Even if it was, many of the products that came out were not defense products. Nazi Germany spent defense money to build defense products. The war was going to end eventually. Like spending too much money on remote work products during a pandemic that will eventually end. It’s going to blow up.

phonon 2y ago

Russia's GDP is a bit more than half of California's. Civil aviation there is a few hundred planes (about the size of Southwest--in total), and is heavily government subsidized. https://www.reuters.com/business/aerospace-defense/russia-splashes-12-bln-keep-aviation-sector-air-2023-12-21/ https://www.reuters.com/business/aerospace-defense/russia-sp...

cpursley 2y ago
The reason they dipped in terms of planes is directly related to sanctions and western countries pulling out based on the article you shared. Worth noting, the foreign parts Sukhoi Superjet 100 (a very good regional jet) are in the process of being fully "Russified" and the MC-21 is actually a true domestic plane vs the Chinese C-919: - https://aviacionline.com/2022/05/sukhoi-tests-100-russian-aviadvigatel-pd-8-engine-on-an-ilyushin-il-76/ https://aviacionline.com/2022/05/sukhoi-tests-100-russian-av... - https://www.youtube.com/watch?v=E32TCdBgkoY https://www.youtube.com/watch?v=E32TCdBgkoY Also, Russia just surpassed Japan to become #4 in terms of GDP PPP (the number that matters), was recently reclassified as a high-income county and is expected to experience relatively high GDP growth, and that's even under the heaviest sanction regime on the planet x3 and after getting cut off from SWIFT: https://www.worldbank.org/en/about/leadership/directors/eds23/brief/russia-was-classified-as-high-income-country https://www.worldbank.org/en/about/leadership/directors/eds2...
- sofixa 2y ago
  > Worth noting, the foreign parts Sukhoi Superjet 100 (a very good regional jet) A very good based on what measurement? Operators have complained about extremely poor reliability, and there have been a high amount of crashes. > and the MC-21 is actually a true domestic plane vs the Chinese C-919: The MS-21 isn't domestic, it uses Western avionics and engines. There's a russified version which is supposed to be launched in 2025-2026, but it's unknown if that would happen considering it's using the Aviadvigatel PD-14 engines which are still undergoing design refinement and testing. It could literally be years before the engines are ready, so when the jet enters service is anyone's guess. > Also, Russia just surpassed Japan to become #4 in terms of GDP PPP (the number that matters), was recently reclassified as a high-income county and is expected to experience relatively high GDP growth, and that's even under the heaviest sanction regime on the planet x3 and after getting cut off from SWIFT: A big issue with these metrics is that they use the official exchange rate for RUB to USD exchange rate, which is entirely theoretical since it's impossible to trade the two due to the sanctions. The real exchange rate is probably much worse for the RUB, so these metrics based on the official theoretical one are highly misleading.