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Significance
Russian defence spending rose by 23% in nominal terms last year as military needs and losses ballooned. The greater secrecy applied to military expenditure suggest this is an understatement. The 2023 budget mandates a further increase from 4.0% to 4.4% of GDP.
Impacts
The militarisation of Russian society will approach levels last seen during the Soviet period.
If the government maintains its commitment to prudent fiscal policy, higher defence costs must mean lower spending in other areas.
Additional spending on procurement will boost manufacturing output and GDP.
Recruitment of extra military personnel will exacerbate shortages in the labour market.
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2023
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