Inflationary pressures make it highly likely that russia will spend more on defense than budgeted for in 2025, the UK Defense Intelligence reports.
It is almost certain that inflation in russia will be higher than the Central Bank of russia (CBR) target of 4 per cent in 2025. This is despite CBR efforts to reduce inflation by increasing interest rates from 7.5 per cent in June 2023 to 21 per cent in December 2024. The actual rate of inflation in 2024 was likely higher than the officially reported figure.
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Pressures on businesses will almost certainly increase if interest rates remain high in 2025. The vast majority of any corporate defaults will almost certainly occur in civilian industries, further increasing reliance on the military industrial complex to drive economic activity.
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