Page 100 - RusRPTAug24

because these sectors are large, accounting for 11% to 12% of GDP. Mining activity declined especially because sales of natural gas to EU countries have collapsed; OPEC+ restrictions on crude oil production have contributed to the decrease. Value-added of trade contracted by more than 7% over two years. The interpretation of this decrease is obvious: resources have been shifted from private consumption to sectors related to fighting the war against Ukraine.
Kurbangaleeva (2024) assesses the economic performance of different Russian regions after the February 2022 invasion. She notes that regions with large concentrations of machine-building industries in particular have benefited from drastically increased public procurement of military equipment. In addition, some poor regions in Russia’s Far East have benefited from an increase in transport infrastructure investment, as Russia tries to redirect its foreign trade more towards China. Public procurement is not the only channel through which public spending reaches households in different regions. Solanko (2024) documents how bank deposits have risen much more in the poorer regions, which have sent proportionally more people to the military. Soldiers’ salaries are higher than what these people used to earn in their home region, which boosts deposits. In addition, the families of those killed or seriously injured in action receive substantial payments from the government. These payments then show up in household deposits.
100 RUSSIA Country Report August 2024 www.intellinews.com