Austin wrote:“GDP growth will be above forecasts”: RDIF head Dmitriev on foreign investment and the impact of sanctions on the economy
All these articles are trash since they never inform the reader about what controls Russia's GDP growth rate. As long as Russian
entities keep massively paying off foreign debt, Russia's GDP growth will be suppressed to below 2% and even below 1%. This "slow"
growth is an accounting fiction since the real economic growth is over 5%. There mere notion of debt nullification being a negative
for the GDP is pure BS:
1) The debt stimulus does not last for the duration of the debt burden and only occurs in a short period of time when the debt money
is injected into the economy. Instead the ongoing interest (including any principal) payments are an ongoing drag on the economy since
these payments are much like import purchases where money permanently leaves the domestic economy.
2) Following (1), the negative shock on the GDP from debt nullification is short-lived and transient and is offset by the elimination of
debt servicing payments. But in the retarded GDP accounting this offset is never included and all such monetary fluxes are treated as
if they are instantaneous without any long term impacts.
What is needed is a coherent report on the structural growth of the GDP. Pure fiscal transactions should not be lumped together with
production and consumption growth. That is, the real economy should not be hidden by the mostly fictional fiscal economy which consists
of money shuffling back and forth. But such proper accounting is not going to be popular with the self-anointed guiding lights of
humanity in the west since their phony fiscal economic fractions can exceed 50% of the total GDP.