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  • Buffalox@lemmy.worldOP
    401·
    9 hours ago

    This is probably the clearest indicator we have that the Russian economy is really struggling.

    This is the highest key interest rate in Russia since it was introduced

    It’s just about 3 months ago the Russian central bank increased interest from 16 to 18%, and about a month that it was increased to 19%, and now to 21%! That’s a HUGE increase in very short time.

    The central bank said in a statement that “growth in domestic demand is still significantly outstripping the capabilities to expand the supply of goods and services.

    Meaning the economy can’t handle the demands put on it by the war on Ukraine.

    inflation expectations continue to increase.

    Meaning the value of wages is undermined. Making the average Russian poorer.

    Nabiullina noted that inflation has overshot the goals because of increased government spending

    Meaning the government is over spending, and the economy can’t sustain current levels.

    As I mentioned last time, it’s notable that the Ruble doesn’t increase significantly in value after these increases. As I have claimed earlier, this is a sign it will get worse, and it’s gotten worse as predicted, and it will continue to get worse until the Russian economy collapses, or overspending ends because the war against Ukraine ends.

    EDIT:
    For comparison Ukraine had interest rates above 20% in 2022 and 2023:
    https://tradingeconomics.com/ukraine/interest-rate

    But Ukraine was invaded and is getting it under control, probably in part due to foreign aid, now it’s a more moderate 13%
    So Ukraine is stabilizing, while Russia is getting worse.

    • SeaJ@lemm.ee
      1·
      2 hours ago

      I’m actually damn surprised that Ukraine is able to keep their interest rates that low.

  • Rentlar
    20·
    8 hours ago

    When you do lots of deficit spending, the sustainable way is to use it to rebuild your country and strengthen it. Sending your most capable young men into Ukraine or in weapons factories, making expensive stuff that does nothing but explode, or stuffing propaganda money up people’s assholes to puppeteer them, does little for your country except extract everything of value and leave most of the country with nothing.

    I’m no fan of China, but at least using large amounts of government funds to build needlessly fancy bridges, buildings, tunnels, railroads and highways brings prosperity and resilience to vast swaths of your country that you might be able to use later.