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The Kremlin plans to increase defense spending by 70% in 2024, signaling a preparation for a long war in Ukraine. This boost in spending is expected to benefit depressed Russian regions and industries related to the war effort, such as food, construction, and pharmaceutical manufacturers. The increase in troops and wartime compensation for soldiers has also led to a boom in depressed industrial regions. However, doubts remain about the sustainability of Russia’s wartime economy, with concerns over budget deficits and an imbalance between supply and demand. Metropolitan cities like Moscow and St. Petersburg have been largely unaffected by the war and Western sanctions.

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