From Heli Simola, BOFIT, in “Wars rate tag …”, consensus forecasts from February and from September:
Defence costs in 2022 will be up by at least RUB 1,200 billion compared with the pre-war allocated overall. According to Russias provisional 2023– 2025 spending plan, its defence costs for that duration is being raised by an overall of RUB 2,600 billion above the formerly budgeted figure. Considering that the start of the war, the nations defence costs is being increased by at least RUB 3,700 billion (approx. In other words, present plans show that the war is increasing budget expense on defence and national security in 2022– 2025 by entirely RUB 7,400 billion (USD 110 billion, or practically 6% of the 2021 GDP total).
Source: Simola, BOFIT (October 18, 2022).
Not as bad as forecasts from end-March (see this post), however in line with those from early March (see here). Still bad.
Additional reminder that GDP is just output (equals income in national earnings accounting). Its not “well-being” (in the financial sense of aggregated utility).
A more point of view on the wars costs can be gained by taking a look at Russias public sector expenditure. There is, of course, considerable unpredictability constructed into these estimations. War-related expense mainly falls under the classification of defence costs in Russias federal spending plan. Defence costs in 2022 will be up by at least RUB 1,200 billion compared with the pre-war budgeted total. According to Russias provisional 2023– 2025 spending plan, its defence costs for that duration is being raised by an overall of RUB 2,600 billion above the previously budgeted figure. Because the start of the war, the nations defence spending is being increased by at least RUB 3,700 billion (approx. USD 53 billion at this years main typical exchange rate).
War-related expediture may also be included under the category of nationwide security spending. Such spending is likewise being boosted in 2022– 2025 by an overall figure of about RUB 3,700 billion above the formerly budgeted level. Simply put, existing strategies reveal that the war is increasing budget plan expenditure on defence and nationwide security in 2022– 2025 by entirely RUB 7,400 billion (USD 110 billion, or almost 6% of the 2021 GDP overall). The expense total might even be higher than this, as not all budget spending is itemised. It is also possible that the level of spending might be raised even more beyond the allocated figure. Without the war, the Russian state could have utilized these funds for advancing the wellbeing of its people. Rather, to fund its war, the Russian state will have to cut expense on more beneficial matters such as road building and construction and science promotion. Extra defence spending may boost output in the military industry, but it will not improve the wellbeing of the nations people
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