Image: www.kremlin.ru Image: www.kremlin.ru

Russian GDP contracted in Q3 – again. The economy is still struggling terribly, so why are people so afraid of it?

It is a well-known thing that injured bears are dangerous.

According to data out this week, Russian GDP contracted by 0.4 per cent in Q3 year on year. The Russian economy has been in recession for around 18 months now, although Capital Economics is predicting modest recovery later this year. “For now, we continue to think that the Russian economy will return to positive growth around the turn of the year, with GDP growth likely to average around 1.3 - 1.5 per cent over 2017 as a whole” it said.

Russia versus the rest

Russia spends roughly five per cent of its GDP on defence – that’s a lot, although Saudi Arabia spends 13.7 per cent of its GDP on defence, so Russia is positively a skinflint by comparison.

But in terms of dollars, it spends $66.4 billion on defence, just over ten per cent of what the US spends, around a quarter of what China spends, and a third less than Saudi.

The world’s fifth biggest spender on defence is the UK, which forks out £55.5 billion, while in sixth place, France spends $50.9 billion.

Between them, the UK, France, Germany and Italy spend around $160 billion on defence, roughly a third of what the US spends.