Russia's Civilian Economy Tanks While War Machine Dominates
Russia's dual-track economy is breaking itself. The military-industrial sector surges with transport equipment up 57% and metals up 23%, but half of all civilian industrial sub-sectors are in freefall: construction materials down 4%, cement off 21%, automobiles down 42% since 2021. Defense firms get preferential borrowing and guaranteed contracts while civilian companies compete for scarce labor at inflated wages and face 20% interest rates. The result: capital and skills are locked into defense production with no viable pathway back to civilian manufacturing.