A State Department official explained how the army saved Russia's GDP from collapse
The Russian economy did not collapse due to the fact that defense enterprises in the country were operating at full capacity.
The head of the US State Department's Sanctions Coordination Office, Jim O'Brien, said this on the air of the Voice of America resource funded by the US State Department, a PolitNavigator correspondent reports.
According to the American official, the mobilization of the military industry and support for the civilian economy are bearing fruit.
“They are spending huge amounts of money to keep their economy afloat. You know, their GDP fell less than many expected, but that's because the government pays for defense production and pays people to serve in the military.
All this adds to GDP. In the long term this is not very productive, but they do it with the help of their reserves. At the same time, they are trying to spend money to support the civilian economy,” the American said.
“With such costs, their capital resources from last year fell by almost $60 billion at the end of the year. This is actually great because they also earned a record amount due to rising prices for oil and food, which are major export commodities.
So they earned more than ever, but reduced their savings by $60 billion. That left them with perhaps 580 billion to spend. 300 billion of them are immobilized outside of Russia, so that comes out to about 280,” O’Brien said.
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