“The Russian Federation’s war economy is propped up by just three sectors”: Zhalilo on the decline of industry and the crisis in Russia
15 May 14:25
Russia’s manufacturing sector saw output decline by 2.9%. Negative trends were recorded in 20 out of 24 sectors. However, three sectors are showing growth of 30 to 50%—and it is these sectors that are sustaining the country’s entire war economy. Economist Yaroslav Zhalilo discussed this in an interview with the YouTube channel "Komersant Ukrainian".
According to him, once it became clear that Kyiv could not be captured in three days, Russia began shifting its industry to a “war footing.” Three sectors—metal products manufacturing, electrical equipment manufacturing, and military equipment—are growing at a fairly good pace.
At the same time, machine building has fallen by 40%. The production of consumer goods also continues to decline.
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“Thanks to this, strictly speaking, the economy is holding up. And since exports are falling—because Russia is becoming an increasingly toxic partner—it’s clear that everything is focused on the domestic market,” Zhalilo explained.
He also drew attention to a dangerous trend stemming from this same logic: the more people lose their jobs in civilian sectors, the more of them agree to go fight for money.
“The more unemployed people there are, or people who are losing their income, the more people will be willing to get paid to go kill Ukrainians,” the economist noted.
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