The Risks of Russia's Rapidly Growing Militarized Economy

Despite international sanctions, Russia's economy has rebounded and experienced rapid growth in 2023, with GDP increasing by 5.5 percent in the third quarter and 3.2 percent in the first 10 months of the year. However, this growth is largely attributed to militarization and the surge in military production, which has led to inflation reaching 7.5 percent and raised concerns of an overheating economy. The reliance on oil and gas exports has insulated Russia's economy against sanctions, but it also highlights the lack of sustainable development. Labor shortages, declining labor productivity, and emigration of skilled workers further pose challenges to Russia's economic growth. The prioritization of military spending over investments in education and healthcare may hinder the country's ability to address civilian issues and prolong the war.