The Russian economy risks "overheating" by increasing defense expenditures - Britain's intelligence

In Russia, inflation increased, and with this the key rate. Intelligence is believed that it will lead to higher costs of war and pressure on the economy. Only from August to September this year, inflation in Russia increased from 5. 3% to 6%. British intelligence believes that such an economic situation in Russia will lead to its greater costs of war in Ukraine. This is stated in a fresh report of the UK Ministry of Defense.

It is noted that such inflation has already responded to the Central Bank of Russia and increased the key rate by two points to 15%. Such indicators are the highest since May last year and will probably persist until 2024. This situation in the country can directly touch Russian consumers. Yes, increasing the key rate can increase the cost of borrowing for Russians. It can also increase the costs of the Russian government to service debt.

British intelligence also emphasizes that due to the rise in costs of defense, demand and pressure in the labor market, the Russian economy may be likely to "overheat". "This is highly likely to provide inflation in Russia in 2024 at a higher level of 4%," the statement said. Among other things, high inflation in Russia can reduce the costs of the federal government for social assistance. In intelligence, they add that this situation shows a reorientation of Russia's economy to finance war.

We will remind, in October an economic specialist and chairman of the New Country Charitable Foundation Andriy Novak expressed his opinion that in the middle of Russia there was already a default, because the state cannot fulfill its debt. In addition, since the beginning of the year, you can observe the deficit of the federal budget, which is growing every month.