(Reuters) – Russia’s economy is poised for tough times as the exodus triggered by the war in Ukraine and a lack of access to technology will put pressure on activity, despite high military spending, it said Monday the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva.

The economy has rebounded strongly after collapsing in 2022, but growth is now dependent on state-funded arms and munitions production.

Kristalina Georgieva, speaking on CNBC, said the IMF forecast gross domestic product (GDP) growth of 2.6% for Russia this year, supported by the massive deployment of fiscal reserves in the war effort .

Today, in Russia, military production is increasing and consumption is decreasing, she summarized.

“This is pretty much what the Soviet Union was like: high level of production and low level of consumption,” she added.

The Russian economy grew by 3.6% in 2023, after contracting by 1.2% in 2022.

Economists based in Russia have highlighted the poor quality of economic growth. Missiles and shells can help increase GDP, but provide only limited benefits to the population.

“I think the Russian economy is going to face very difficult times due to the exodus of its population and limited access to technology,” Kristalina Georgieva said.

“If this figure (2.6%) seems to be good, it masks more important problems,” concluded the leader.

(Reporting by Alexander Marrow and Darya Korsunskaya, by Corentin Chappron, editing by Kate Entringer)

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